June 28, 2017

Training, exams discussed during BSA/AML hearing

The toll of compliance training and costs related to Bank Secrecy Act and anti-money laundering requirements were highlighted during a House Financial Services Subcommittee on Financial Institutions and Consumer Credit hearing on Wednesday.

Rep. Roger Williams, R-Texas, asked hearing witness Faith Anderson, senior vice president and general counsel of NAFCU-member American Airlines Credit Union, about the preparation for a BSA exam. She explained that it take two months to prep, including board and staff training. When asked what kind of training her staff does, Anderson answered online training, continuous testing and deficiency spotting. She also provided an explanation on how money and time spent on training and compliance takes away from business operations and member service.

In opening remarks for Wednesday's hearing, Rep. Carolyn Maloney, D-N.Y., discussed the NAFCU-supported Corporate Transparency Act. This legislation would require companies to disclose true beneficial owners when a company is formed. This information will also be shared with financial institutions. She said this bill will reduce the regulatory burden on financial institutions so they don't have to spend as much time investigating customers to figure out who are the true beneficial owners.

Subcommittee Vice Chairman Keith Rothfus, R-Pa., said both suspicious activity reports and other BSA reports should deliver actionable intelligence to law enforcement agencies. He said that under current examination priorities, too much emphasis is put on creating the reports without actual feedback or use from or by law enforcement agencies.

Anderson was also asked about supervisory examination duplication. She explained that minor violations of BSA trigger findings from examiners, regardless of its efficacy at curbing bad actors.

Anderson fielded a question by Rep. Nydia Velázquez, D-N.Y., about wire transfers related to real estate. She explained the processes in place to discourage fraud and discussed how communications with members occur on wire transfers.