Compliance Process Outsourcing - A Service Level Primer for the Chief Compliance Officer was published today by The Josefa Group. It provides an overview of issues to address when developing a technical service level agreement for the outsourcing of compliance functions. To view the report see
Thought Leadership.
FinCEN has released issue 15 of the SAR Activity Review Trends Tips & Issues. This edition
focuses on the Securities Industry. Included is an assessment of SARs filed, FINRA’s regulatory review of SARs, law enforcement cases aided by SARs including Ponzi schemes and mortgage fraud, along with guidance on effective SAR programs.
The complete issue can be found at http://www.fincen.gov/news_room/rp/files/sar_tti_15.pdf.
FinCEN is proposing to revise the regulations implementing the Bank Secrecy Act (‘‘BSA’’) regarding money services businesses (‘‘MSBs’’) to clarify which entities are covered by the definitions.
See http://edocket.access.gpo.gov/2009/pdf/E9-10864.pdf
See Guidance on Supporting Information Suitable for Determining the Portion of a Business Customer’s Annual Gross Revenues that is Derived from Activities Ineligible for Exemption from Currency Transaction Reporting Requirements at http://www.fincen.gov/statutes_regs/guidance/pdf/fin-2009-g001.pdf
The slow leak of news related to the “stress test” of the banks “too big to fail” has been finally superseded with the details from the Federal Reserve Bank. Following is a statement from Fed Chairman Ben Bernanke and an overview of the results of the test.
http://www.federalreserve.gov/newsevents/press/bcreg/bernankescap20090507.htm
http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20090507a1.pdf
FinCen has issued an administrative ruling stating that insurance companies do not fall within the regulatory definition of “financial institution” and are therefore eligible for exemption from Currency Transaction Reporting.
The text of the complete ruling should be reviewed at http://www.fincen.gov/statutes_regs/guidance/pdf/fin-2008-r013.pdf
The OTS has updated its Examination Handbook Section 1330 containing guidance and procedures for examining for compliance with the rules on electronic fund transfers such as ATM, point-of-sale, and remote banking systems. See the following link for full details:
http://files.ots.treas.gov/74854.pdf
The “stress tests” conducted for banks with assets exceeding $100B have been concluded. And although there has been much controversy over the test process and its ultimate outcome, it is important for small financial institutions to look to the methodology when evaluating their own risk management practices.
Formally known as the Supervisory Capital Assessment Program (SCAP), the test was designed to evaluate revenues, losses, and required reserves under two economic scenarios with one scenario that is expected to be worse than current projections. The outcome of the test is to determine the level of additional capital that may be needed.
The SCAP was performed on the 19 bank holding companies. Although there are certainly significant differences among the remaining group of banks, it is reasonable to conclude that regulators will look to the process used by SCAP as a benchmark for other financial institutions. Consequently, risk managers should look to the methods employed by SCAP and compare them to their own internal stress tests. Differences that are applicable to an organization should be presented to management along with recommendations for modifying internal stress tests.
A complete overview of the SCAP design and implementation can be found at:
http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20090424a1.pdf
Recent Enforcement Actions
April 30, 2009 - Written agreement with Heritage Bank
April 29, 2009 - Written agreement with Cooperative Bankshares
April 24, 2009 - Written agreement with K Capital Corporation
April 23, 2009 - Written agreement with First Regional
April 23, 2009 - Written agreement with Bank On It
April 23, 2009 - Written agreement with Tysan Corporation
April 21, 2009 - Written agreement with Strategic Capital Bancorp
April 21, 2009 - Written agreement with Citizens Central Bancorp
April 20, 2009 - Written agreement with Amoret Bancshares
April 16, 2009 - Written agreement with Beverly Hills Bancorp, WFC, and Wilshire Acquisitions
April 15, 2009 - Written agreement with TFC Holding Company
April 14, 2009 - Written agreement with Community First Bank
April 13, 2009 - Written agreement with Silverton Financial Services
April 9, 2009 - Written Agreement with San Joaquin Bancorp and San Joaquin Bank
April 7, 2009 - Written agreement with Venture Financial Group
April 7, 2009 - Prompt corrective action directive against Michigan Heritage Bank
April 6, 2009 - Written Agreement with Community Bankshares and Community Banks of Colorado
April 6, 2009 - Written Agreement with United Security Bancshares
April 2, 2009 - Termination of enforcement action against WestLB AG and the New York branch of WestLB AG
April 2, 2009 - Written Agreement with Blossman Bancshares
March 31, 2009 - Prompt corrective action directive against Heritage Bank
March 30, 2009 - Written agreement with BankEast Corporation
March 27, 2009 - Written agreement with First State Bank of Red Bud
March 26, 2009 -Termination of enforcement action against Eagle National Holding Company
OFAC has announced its first Annual Symposium for International Trade to take place in Washington DC on May 15, 2009. For further details see:
http://www.treas.gov/offices/enforcement/ofac/events/symp_flyer_040109.pdf