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With Correspondent Relationships, Banks Must Ponder Ambiguities
By Brian Orsak
printAny seasoned Bank Secrecy Act compliance professional can tell you that producing a complete list of all her institution's correspondent relationships for the close scrutiny required by federal law is no clear-cut assignment. Federal regulations require U.S. financial institutions to conduct "enhanced," or greater, diligence when gauging the money laundering risk related to their correspondent relationships. The U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) defines such relationships as those established for a foreign institution to receive deposits, make payments or handle financial transactions. But banking compliance officers aren't clear on how those relationships are delineated, and consequently how to...
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As any compliance officer knows, vetting a banking correspondent relationship is no simple matter. Initial evaluations of another institution's anti-money laundering program can be long, the cost high and reviews perpetual. Three consultants talk about best practices in correspondent banking.