By Cody Roberts
Never before have banks been so caught between customers and the government.
The Bank Secrecy Act (BSA) exacerbates this, in effect making banks extensions of law enforcement. This is a situation banks have dealt with for decades (since enactment in 1970) but the difficulty has never been so serious. This recent seriousness is due to two main factors: 9/11 and policies of the Obama administration.
The enormous emphasis by the federal government on the BSA was due to the tragedy that occurred on September 11, 2001. Increased requirements via the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act to stem and identify terrorism-related financing include customer identification programs (CIP), information sharing, and increased suspicious transaction/anti-money laundering (AML) reporting. Massive amounts of money are spent for training, software and personnel to scrutinize every transaction and customer. These new requirements have also led to longer and more extensive BSA examinations.
Administration policies have also wreaked havoc on banks. For example, the Department of Justice’s Operation Choke Point choked off access to banking services for some legitimate businesses, such as firearms sales, of which the administration disapproved. Another policy example is the aggressive use of suspicious activity reporting (SAR) data by the Internal Revenue Service to confiscate bank customer deposit accounts based on allegations of structuring.
As a result of these activities, banks are left to answer increasing complaints from customers while facing increasing pressure from regulators.
We can help. Did you know that American Bank Systems’ CompliancePro® system contains two sections based on the Core Examination Procedures as well as the Expanded Examination Procedures from the FFIEC Bank Secrecy Act / Anti-Money Laundering Examination Manual? For more information or to schedule a demonstration, go to www.americanbanksystems.com/banking-supplies/compliancepro/ or call us at 800.522.4990.
