Resource sharing for bank secrecy act compliance

Key points

• These collaborative arrangements would be most applicable to community banks and credit unions with lower risk profiles, less complex operations and with a community focus. The regulators encourage risk assessment to determine if an institution's risk profile qualifies.
  
• Importantly, the regulators remind that sharing resources does not relieve an institution of its individual responsibility for BSA compliance.
   

Sharing resources: benefits and examples

Federal regulators issued a joint interagency statement on October 3, 2018, permitting certain community banks and credit unions to share Bank Secrecy Act (BSA) resources through the use of "collaborative arrangements."
The statement, the Interagency Statement on Sharing Bank Secrecy Act Resources, specifies that collaborative arrangements are most suitable to community banks and credit unions, as they have "less complex operations, and lower-risk profiles for money laundering or terrorist financing."
The statement acknowledges that by using shared resources in a "collaborative arrangement" to manage certain BSA/ Anti-Money Laundering (AML) obligations, banks and credit unions can benefit from enhanced access to specialized expertise, reduced costs in managing the risk of illicit finance, and overall manage certain BSA/AML obligations more efficiently and effectively.

The statement sets forth certain BSA activities that shared resources can support within the internal control function, such as the following:

• Reviewing, updating, and drafting BSA/AML policies and procedures;
• Reviewing and developing risk-based customer identification and account monitoring processes;
• Tailoring monitoring systems and reports for their risks;
• Conducting independent testing activities to evaluate the adequacy and effectiveness of the institution’s BSA/AML compliance program, particularly since it can be challenging for community-focused banks and credit unions to identify independent personnel internally;
• Hosting BSA/AML training by a qualified instructor, including on topics like alert analysis, investigative techniques, alert trends and money laundering methods, and regulatory updates.