control its money laundering, terrorist financing and other illicit financial activity risks. For example, the bank’s monitoring system to identify, research and report suspicious activity should be risk-based to incorporate any necessary additional screening for higher-risk products, services, customers and geographic locations as identified by the bank’s BSA/AML/CFT risk assessment. Also, independent testing (audit) should review the bank’s BSA/ AML/CFT risk assessment, including how it is used to develop the BSA/AML compliance program. Banks that choose to implement a consolidated or partially consolidated BSA/AML/CFT compliance program should assess risk within business lines and across activities and legal entities. Consolidating money laundering, terrorist financing and other illicit financial activity risks for larger or more complex banking organizations may assist senior management and the board of directors in identifying, understanding, and appropriately mitigating risks within and across the banking organization. To understand money laundering, terrorist financing and other illicit financial activity risk exposures, the banking organization should communicate across all business lines, activities and legal entities. Identifying a vulnerability in one aspect of the banking organization may indicate vulnerabilities elsewhere. Conclusion The importance of a BSA/AML/CFT risk assessment cannot be overstated. A bank-prepared assessment can establish the direction a bank’s BSA/AML/CFT program will take, as well as guide BSA exams and other reviews/audits. Just as with a CRA performance context, preparing your own BSA/AML/CFT risk assessment can provide the roadmap to guide your compliance and examiners’ evaluation of your program. And the agencies have given you a roadmap to guide your risk assessment — the BSA/AML/CFT examination procedures. Use it, if you have not already, before the examiners come for their next visit. William J. Showalter, CRCM, CRP, is a senior consultant with Young & Associates Inc. (younginc.com), with over 40 years’ experience in compliance consulting, advising and assisting financial institutions on consumer compliance and compliance management issues. He has also developed and conducted compliance training programs for individual banks and their trade associations, and has authored or co-authored numerous compliance publications and articles. Bill can be reached at wshowalter@younginc.com. COMPETITIVE RATES We take pride in our operational efficiency which results in MIB being able to provide valuable services at highly competitive prices. Call us to find out how much you could save. Lending Services Operational Services Audit Services mibanc.com MEMBER FDIC HIGH VALUE SERVICES, Chris Bryan 816-500-6253 Travis Anderson 402-440-2448 16 In Touch
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