January 15, 2014

BSA Blast notes FinCEN take on 'responsibility'

NAFCU's latest edition of the BSA Blast focuses on Financial Crimes Enforcement Network Director Jennifer Shasky Calvery's update on the agency's activities and progress since she took office, as well as a look at the ongoing consequences of the Bernie Madoff scandal.

NAFCU Regulatory Paralegal Shari Pogach covered a recent speech made by Shasky Calvery acknowledging the difficulties of complying with the Bank Secrecy Act, and discussing the creation of a stand-along Enforcement Division to be the primary action arm in the agency's enforcement efforts at home and abroad. She emphasized the idea of "responsibility," saying: "As Director, I feel it is imperative that not only should those who violate the BSA be held accountable, but those who violate the BSA must take responsibility."

Shasky Calvery also detailed the findings of a "delta team" subcommittee formed to determine if the effort spent in time and money for compliance is efficient – what the subcommittee called "the space between compliance risk and illicit financing risk." The team developed several initiatives in response to problems they identified, including:

  • changing the FinCEN advisory format to be more streamlined;
  • issuing a 314(b) program fact sheet;
  • beginning discussions with the Justice Department on the subject of banking and state-sanctioned marijuana dispensaries; and
  • creating a new division – the Intelligence Division – to expand information sharing between government and industry.

The Blast also discussed new enforcement actions taken against JPMorgan Chase and its subsidiaries for BSA violations connected with the Bernie Madoff scandal – a multi-billion dollar Ponzi scheme discovered in 2008 after decades of fraudulent activity. The violations will cost JPMorgan Chase $2.05 billion overall.

The newsletter also reviewed the Treasury Department's Office of Foreign Assets Control's actions against Compass Bank of Alabama, the Royal Bank of Scotland, and HSBC Bank USA for non-compliance.

The BSA Blast is a quarterly enewsletter offered to NAFCU members. It provides the latest news on compliance issues and industry activity related to the Bank Secrecy Act and OFAC regulations.