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Best Practices for a Successful BSA/AML Board Training

Tiffany McLain, CAMS
December 8, 2021
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Best practices for your BSA/AML risk assessment

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Internal controls, independent testing, a designated BSA Officer, training, and customer due diligence: the current pillars of BSA/AML. It is essential to include the board of directors when financial institutions complete their annual employee training. As trustees of your financial institution, each pillar is critical to the board. If the board does not understand the Bank Secrecy Act (BSA) and your anti-money laundering (AML) program, they may not fully understand their role, affecting much-needed resources down the road.

Unlike the customer profile and detailed transaction training offered to frontline staff, the board needs to see the BSA program from a higher level to understand the enterprise-wide risk to the institution. The following topic points can help your financial institution guide discussions and create a customized board training.

Board Training
Should BSA/AML board training be in person or online?

An in-person or video conference can help financial institutions facilitate deeper discussions and answer questions as needed. Experience shows that there is always at least one person who wants more detail on one of your training sections. It's good for board members to be involved, develop a better relationship with the person running the program, and gain trust in their expertise.

Remember, it is a regulatory requirement that each member is trained annually, so be sure to document and retain your attendee list. If any board members were absent, ensure they have access to training materials along with acknowledgment of the individual training. Offer to schedule a one-off video conference if needed.

Agenda Ideas
Creating a BSA/AML board training program

Specific topics for your BSA board training may include the following:

Give a brief history of BSA/AML

The key point to make regarding the history of BSA/AML is to understand is understanding laws and regulations. An excellent place for information is FinCEN History of AML Laws.

Explain key terms

There are a lot of acronyms in BSA that the board may not be familiar with. A reference guide with these acronyms and what they represent can be helpful during training. Some examples include:

  • BSA/AML
  • OFAC
  • FinCEN
  • MRB
  • MSB
  • AMLA
  • USA PATRIOT

Explain the five pillars

The board must understand the pillars of BSA: internal controls, a designated BSA Officer, ongoing training, independent testing, and customer due diligence. Explain each pillar and how your financial institution complies.

Set board expectations

The board plays an integral role in creating a culture of compliance. Provide a copy of the FinCEN Advisory during the training.

The Federal Financial Institutions Examination Council (FFIEC) advises that a financial institution could strengthen its BSA/AML culture of compliance by:

  • Having leadership that actively supports and understands compliance efforts
  • Not allowing compliance to be compromised by revenue interests
  • Making efforts to manage and mitigate BSA/AML deficiencies
  • Ensuring relevant information from various departments within the organization is shared with BSA/AML staff
  • Devoting adequate resources to its compliance function (both human and technological)
  • Ensuring that the BSA/AML is effective by conducting independent and competent testing
  • Ensuring that leadership and staff understand the purpose of its BSA/AML efforts.

Use OFAC FAQs

Use Treasury OFAC FAQs to gather basic information, then discuss how your bank complies. During the training, discuss the software you have to review potential matches. Review any blocked transactions, any restrictions you have on purchases in foreign countries, or any other risk mitigations you have in place.

Explain activities that require FinCEN filing

Utilize your suspicious activity report (SAR) form for a brief sample of some of the activities that are required to be filed. Discuss thresholds for mandated reporting and how many SARs you filed during the year. Report top filing activities and significant cases (you do not need to disclose the customer or member). For instance, do you have an exceptionally large number of elder abuse cases? If so, what can you do to address those? Utilize FinCEN SAR Stats to determine how your SARs compare to the rest of your geographic footprint.

Address recent fines and enforcement actions

To keep up with constantly changing fines and enforcement actions, Bankers Online can be a great resource. Address some of the recent penalties, especially for any financial institutions that are similar in asset size to your institution, and discuss related issues and consequences.

Emphasize how your AML program benefits the institution

BSA is often perceived as a cost center. Find some actual cases that have benefited from the work of BSA employees at FinCEN Law Enforcement case examples, and civil money penalties can be assessed for insufficient AML programs. Discuss how the community benefits from being instrumental in stopping illicit activity. That is the type of front-page news you want for your institution.

Review local money laundering cases

Google the term "money laundering" for your state or city to find recent activity. Include surrounding cities if your footprint is in a small town with no known activity. Add articles to your training to show that crime does occur everywhere. It is much easier for your board to understand the importance of seeing that a drug trafficker was arrested down the street.

Review upcoming regulatory changes

Keep the board abreast of potential regulatory changes. Stay up-to-date on all legislation by reading industry articles, attending free webinars from reputable sources, and leveraging other resources, like the Abrigo Knowledge Center. Consider what impact these changes could have on your institution. For example, the Anti-Money Laundering Act of 2020 is coming, and once regulations are written, there will be implementation factors to consider.

Discuss staff training

Discuss your department's training, including internal and external resources. The BSA department must be ongoing and get more than just the annual BSA training.

Offer a Q&A session

Give your board time to ask questions, but also ask if there’s additional information you can provide to make their job easier.

That’s a lot of information to cover, but this is critical for the board to receive annually. Ideally, board training would last at least 20 to 30 minutes. A video or slide show to accompany the training is a common best practice for these trainings. If you need assistance with developing or delivering board training, reach out to our industry experts in Advisory Services for assistance.

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About the Author

Tiffany McLain, CAMS

Senior Financial Crimes Investigator
Tiffany McLain has nearly two decades of banking experience. She started in operations and worked her way to BSA/AML where she has been since 2007. Her responsibilities have included CTRs, alert triage and investigations, SAR writing, training (staff & board), risk assessment and policy writing, system performance and adjustments, quality

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About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

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