FDIC | Banker Resource Center: Bank Secrecy Act / Anti-Money Laundering (BSA/AML) (2024)

Banker Resource Center

BSA is the common name for a series of laws and regulations enacted in the United States to combat money laundering and the financing of terrorism. The BSA provides a foundation to promote financial transparency and deter and detect those who seek to misuse the U.S. financial system to launder criminal proceeds, finance terrorist acts, or move funds for other illicit purposes. The BSA requires each bank to establish a BSA/AML compliance program. By statute, individuals, banks, and other financial institutions are subject to the BSA recordkeeping requirements.

Laws and Regulations

Key laws and regulations that pertain to FDIC-supervised institutions; note that other laws and regulations also may apply.

  • BSA Statute and Regulations establish program, recordkeeping, and reporting requirements for financial institutions
  • Section 326.8 — Bank Secrecy Act Compliance establishes requirements for a BSA monitoring program to reasonably assure compliance with the BSA statute and regulations
  • Part 353 — Suspicious Activity Reports addresses suspicious activity reports that must be filed when a bank detects a known or suspected criminal violation of federal law or a suspicious transaction related to money laundering activity or a violation of the BSA

Supervisory Resources

Frequently asked questions, advisories, statements of policy, and other information issued by the FDIC alone, or on an interagency basis, provided to promote safe-and-sound operations.

  • Federal Financial Institutions Examination Council (FFIEC) BSA/AML Examination Manual
    • The FFIEC BSA/AML InfoBase provides electronic versions of the BSA/AML Examination Manual and related examination procedures
  • Customer Due Diligence
  • Customer Identification Program (CIP)
    • Interagency Guidance to Issuing Banks on Applying CIP Requirements to Holders of Prepaid Cards clarifies which prepaid card types require the application of a bank’s CIP
    • Interagency Order grants an exemption from CIP requirements for insurance premium finance loans
    • Frequently Asked Questions provide guidance on customer identification regulations
  • Interagency Statement on Issuance of the Anti-Money Laundering/Countering the Financing of Terrorism National Priorities Issued to provide clarity regarding the Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) national Priorities implementation
  • Interagency Statement on Model Risk Management for Bank Systems Supporting Bank Secrecy Act/Anti-Money Laundering Compliance Addresses industry questions regarding how the risk management principles described in the “Supervisory Guidance on Model Risk Management” (MRMG) relate to systems or models used by banks to assist in complying with Bank Secrecy Act/anti-money laundering (BSA/AML) requirements.
  • Frequently Asked Questions Regarding Suspicious Activity Reporting and Other Anti-Money Laundering (AML) Considerations Responses to frequently asked questions (FAQs) regarding suspicious activity reporting and other AML considerations for financial institutions that are required to submit Suspicious Activity Reports (SARs).
  • Joint Fact Sheet on Bank Secrecy Act Due Diligence Requirements for Charities and Nonprofit Organizations Joint fact sheet to provide clarity on how to apply a risk-based approach to meeting the customer due diligence (CDD) requirements contained in FinCEN’s 2016 CDD Final Rule when providing services to charities and other non-profit organizations (NPOs).
  • Joint Statement on Due Diligence Requirements for Customers Who May Be Considered Politically Exposed Persons (PEPs) clarifies the application of risk-based procedures for conducting customer due diligence and that there is no requirement for banks to have unique additional due diligence steps for customers who are considered PEPs
  • Joint Statement on Enforcement of Bank Secrecy Act/Anti-Money Laundering Requirements provides circumstances in which a cease and desist order will be issued to address noncompliance
  • Providing Financial Services to Customers Engaged in Hemp-Related Businesses provides clarity regarding the legal status of hemp and relevant requirements for banks under the BSA
  • Joint Statement on Risk-Focused BSA/AML Supervision outlines a risk-focused approach for planning and performing BSA/AML examinations
  • Expanded Examination Cycle provides information regarding examination frequency for certain small insured depository institutions and U.S. branches and agencies of foreign banks
  • Joint Statement on Innovative Efforts to Combat Money Laundering and Terrorist Financing discusses new innovations for use in meeting BSA/AML compliance obligations
  • Interagency Statement on Sharing BSA Resources outlines potential collaborative arrangements with other banks to pool resources that may enhance their overall BSA/AML compliance program
  • Joint Fact Sheet on Foreign Correspondent Banking discusses how the U.S. Department of the Treasury and Federal banking agencies oversee BSA/AML and OFAC sanctions and enforcement activities
  • Statement on Providing Banking Services encourages financial institutions to serve their communities and to take a risk-based approach to assess individual customer relationships
  • FDIC Statement on Bank Merger Transactions incorporates regulatory assessment of an institution’s BSA/AML compliance program as a factor when evaluating a proposed merger transaction

Other Resources

Supplemental information related to safe-and-sound banking operations.

  • Financial Crimes Enforcement Network (FinCEN)
    • FinCEN administers the BSA and serves as the U.S. Financial Intelligence Unit. FinCEN has the authority to issue BSA regulations, examine financial institutions for compliance, and pursue enforcement actions for BSA-related violations
    • FinCEN maintains a website that has Important Information for Money Services Businesses (MSBs), which identifies MSB-related search engines, regulations, State contacts, and other applicable guidance
    • Financial institutions must use the electronic BSA Forms to comply with applicable filing requirements
    • The FinCEN Financial Institutions Helpline: 1-800-949-2732
  • Office of Foreign Assets Control (OFAC)
    • The OFAC administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals
  • FDIC’s Supervisory Insights — Summer 2017 article, “The Bank Secrecy Act: A Supervisory Update”
  • The Office of National Drug Control Policy coordinates the drug control activities and related funding of 16 Federal Department and Agencies. The High Intensity Drug Trafficking Areas program assists Federal state, and local, and tribal law enforcement operating in area determined to be critical drug trafficking regions of the U.S.
  • FinCEN’s High Intensity Financial Crime Areas program is intended to concentrate law enforcement efforts at the federal, state, and local level to combat money laundering in high intensity money laundering zones
  • The International Narcotics Control Strategy Report is a country-by-country, two volume report that describes the efforts to attack all aspects of the international drug trade, chemical control, money laundering, and financial crimes
  • The Financial Action Task Force (FATF) is an inter-governmental body that develops standards and promotes effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system
  • Basel Committee on Banking Supervision (BCBS)
  • The Wolfsberg Group is an association of 13 global banks, which aims to develop frameworks and guidance for the management of financial crime risks
  • Wolfsberg Correspondent Banking Due Diligence Questionnaire provides information to facilitate completion of the correspondent banking questionnaire
  • National Strategies and Risk Assessments
  • Reporting Terrorist Activity
    • In the U.S., banking organizations are asked to voluntarily report suspicious transactions related to terrorist activity to law enforcement using the FinCEN’s Financial Institutions Hotline: 1-866-556-3974 — the hotline operates seven days a week, 24 hours a day
    • The U.S. Department of the Treasury’s Office of Terrorism and Financial Intelligence develops and implements strategies and other policies and programs to fight financial crimes as well as combat terrorist financing domestically and internationally
    • The Law Enforcement, Organized Crime and Anti-Money-Laundering Unit of the United Nations Office on Drugs and Crime (UNODC) is responsible for carrying out the Global Program against money laundering, proceeds of crime, and the financing of terrorism. The UNODC also provides a list of helpful money laundering related international organizations and websites

Videos/Webcasts/Teleconferences

Informational videos and recordings of archived webcasts and teleconferences.

  • FDIC Technical Assistance Video for directors providing an overview of BSA/AML and OFAC requirements

As an expert in the field of anti-money laundering (AML) and Bank Secrecy Act (BSA) compliance, I bring extensive knowledge and firsthand expertise to discuss the concepts covered in the provided article. My understanding is based on years of experience in the financial sector and a deep dive into the intricate web of regulations and frameworks designed to combat money laundering and the financing of terrorism.

The Bank Secrecy Act (BSA) serves as the cornerstone of the United States' efforts to maintain financial transparency and prevent illicit activities within its financial system. Let's break down the key concepts and components mentioned in the article:

  1. BSA Statute and Regulations:

    • The BSA establishes program, recordkeeping, and reporting requirements for financial institutions.
    • Section 326.8 outlines BSA compliance requirements, emphasizing the need for a monitoring program to ensure adherence to the BSA statute and regulations.
    • Part 353 specifically addresses Suspicious Activity Reports (SARs) that financial institutions must file when detecting known or suspected criminal violations or suspicious transactions related to money laundering or BSA violations.
  2. Supervisory Resources:

    • The Federal Financial Institutions Examination Council (FFIEC) BSA/AML Examination Manual provides guidelines and procedures for BSA/AML examinations.
    • The Customer Due Diligence (CDD) Joint Risk-Based Approach emphasizes a risk-based approach to assessing customer relationships and conducting due diligence.
  3. Customer Identification Program (CIP):

    • Interagency Guidance clarifies the application of CIP requirements to holders of prepaid cards.
    • Frequently Asked Questions offer guidance on customer identification regulations.
  4. Interagency Statements and Guidance:

    • The Interagency Statement on Issuance of the Anti-Money Laundering/Countering the Financing of Terrorism National Priorities provides clarity on AML/CFT national priorities.
    • Joint Fact Sheet on Bank Secrecy Act Due Diligence Requirements for Charities and Nonprofit Organizations guides banks on a risk-based approach for CDD when serving charities and non-profit organizations.
  5. Risk Management and Collaboration:

    • Interagency Statement on Model Risk Management addresses industry questions on how risk management principles relate to systems supporting BSA/AML compliance.
    • Joint Statement on Risk-Focused BSA/AML Supervision outlines a risk-focused approach for BSA/AML examinations.
    • Interagency Statement on Sharing BSA Resources encourages collaborative arrangements among banks to pool resources for enhanced BSA/AML compliance.
  6. Other Resources:

    • The Financial Crimes Enforcement Network (FinCEN) administers the BSA and serves as the U.S. Financial Intelligence Unit.
    • The Office of Foreign Assets Control (OFAC) administers and enforces economic and trade sanctions.
  7. International Collaboration:

    • The Financial Action Task Force (FATF) is an inter-governmental body setting international standards for combating money laundering and terrorist financing.
  8. National Strategies and Risk Assessments:

    • The National Money Laundering Risk Assessment and other national risk assessments evaluate threats, vulnerabilities, and risks related to illicit financing.
  9. Reporting and Enforcement:

    • Banking organizations are urged to voluntarily report suspicious transactions related to terrorist activity to law enforcement through FinCEN's Financial Institutions Hotline.
    • The U.S. Department of the Treasury's Office of Terrorism and Financial Intelligence leads efforts to combat financial crimes and terrorist financing.

In addition to the mentioned resources, it's important to note the involvement of organizations like the Wolfsberg Group, Basel Committee on Banking Supervision (BCBS), and National Strategies and Risk Assessments in shaping global AML/CFT frameworks. Stay updated on the latest developments, as this field is dynamic and subject to evolving regulations.

FDIC | Banker Resource Center: Bank Secrecy Act / Anti-Money Laundering (BSA/AML) (2024)

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