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FFIEC compliance: Ensuring access to suitable resources for effective BSA management

Kate Randazzo
August 19, 2024
Read Time: 0 min

A strong BSA program starts with FFIEC compliance

Building a robust BSA program means having access to the staffing and resources you need. Learn how the FFIEC manual can help you make the case for more resources to your board.

You might also like this podcast, "Ensuring access to the FFIEC’s suitable resources at your financial institution: What BSA compliance officers need to know.

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Takeaway 1

The FFEIC is clear that BSA compliance officer's need autonomy and the right tools to stay compliant, but many programs don't have access to the resources they need.

Takeaway 2

Failing to meet FFIEC compliance standards can have serious consequences for banks and credit unions. Even inadequate staffing can result in fines or penalties.

Takeaway 3

BSA compliance officers should present clear requests to their boards, outlining their needs and providing examples of the penalties that they face if they do not meet the FFIEC standard.

Empowering BSA programs

What does FFIEC compliance require in terms of suitable resources?

Adhering to the Federal Financial Institutions Examination Council (FFIEC) compliance standards is essential for maintaining a robust Bank Secrecy Act (BSA) program. And according to the FFIEC, BSA compliance officers must be given access to "suitable resources" to perform their jobs effectively. This requirement is not just a regulatory formality; it’s about empowering compliance officers to safeguard their institutions effectively against money laundering and other financial crimes. But what exactly are these "suitable resources?"

The FFIEC compliance manual clearly states that BSA compliance officers must have the appropriate authority, independence, and access to resources to carry out their duties effectively. This includes having control over the BSA department’s operations, making necessary adjustments to the Anti-Money Laundering (AML) system, and managing staffing levels.

As Hannakah Rubin, Senior Client Development Consultant at Abrigo, explained in a recent episode of Abrigo’s Ahead of the Curve podcast, the FFIEC guidelines provide some room for interpretation. However, the core requirement is that compliance officers must be able to take any necessary actions to mitigate risks.

“The FFIEC exam manual states very clearly that the BSA compliance officer is supposed to have control over the BSA department, and it uses words like ‘everything,’ ‘all,’ and ‘any’ to apply to appropriate actions,” Rubin said. “This is what it boils down to: Do you have what you need to be able to do your job and to be able to do it effectively, protecting the institution, yourself, and your customers or members?"

Rubin highlighted that the day-to-day management of the BSA department is a responsibility that falls squarely on the compliance officer. This responsibility includes the authority to select and modify AML systems, determine staffing needs, and ensure that all operational aspects align with the institution’s risk profile. The board’s role in FFIEC compliance is to provide the necessary budget and resources, ensuring that revenue interests do not compromise compliance efforts.

BSA autonomy

Common challenges in meeting FFIEC expectations

Despite clear guidance from FFIEC compliance rules, many financial institutions struggle to meet these standards, often due to inadequate staffing and limited authority granted to the BSA compliance officer. Rubin notes that it is not uncommon for compliance officers to require board approval for necessary changes, which can impede their ability to respond quickly to emerging risks. FFIEC compliance standards stress that compliance officers, who are trained and certified in AML/CFT practices, should have the autonomy to make decisions without undue interference from the board.

Inadequate staffing is another significant challenge. According to Rubin, insufficient human resources can lead to failures in monitoring and alert generation, both of which are critical components of a strong BSA program. These failures can result in missed suspicious activities, delayed investigations, and ultimately, non-compliance with regulatory requirements.

Fines and penalties

Consequences of noncompliance with FFIEC standards

Failing to adhere to FFIEC compliance standards can have serious consequences. For instance, if a BSA compliance officer is not provided with the resources necessary to maintain an effective program, the institution may fail to file required Suspicious Activity Reports (SARs) or may file them incorrectly, leading to hefty fines. These penalties can accumulate daily and per transaction, resulting in significant financial and reputational damage.

The FFIEC compliance manual warns that failing to provide adequate staffing can lead to severe penalties, including fines for willful negligence. One notable case involved U.S. Bank, which was fined $185 million for limiting the number of alerts their compliance officers could address. This case highlights the importance of granting BSA compliance officers the authority and resources they need to fulfill their duties effectively.

Strategies for BSA success

Clear communication with the board is key for FFIEC compliance

To ensure adherence to FFIEC compliance standards, Rubin recommends that BSA compliance officers present clear, facts-based requests to their boards. This includes outlining the specific resources required, such as staffing levels and AML system capabilities, and providing examples of the consequences faced by other institutions that failed to meet these needs. 

“When it comes to presenting to the board, you want to outline the five pillars, emphasize the resources that the FFIEC expects you to have as a BSA compliance officer, and give some examples of what's happened to institutions that failed to provide those resources to their BSA compliance officer,” Rubin said. “Leave that information in their lap with very simple statements of what you need.”

BSA compliance officers should do their best to drive home the importance of following FFEIC guidelines before making the case for the resources they need. Documenting these requests and the board’s responses is also crucial, as it provides evidence during regulatory examinations that the compliance officer has taken the necessary steps to secure suitable resources.

Ongoing training is another vital component of maintaining FFIEC compliance. Compliance officers should ensure that their teams receive regular, relevant training that aligns with the latest industry trends and regulatory changes. Of course, this means documenting all training activities and keeping the board informed of these efforts is a must.

Access to suitable resources, as required by FFIEC compliance standards, is not just a regulatory obligation—it is critical to the effective functioning of a BSA program. Financial institutions must ensure that their BSA compliance officers have the authority, independence, and resources necessary to protect the institution from financial crimes. By following these guidelines and addressing common challenges such as inadequate staffing, institutions can avoid severe penalties and maintain a strong, compliant BSA program.

This blog post was written with the assistance of ChatGPT, an AI language model, and was reviewed by Abrigo.

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About the Author

Kate Randazzo

Content Marketing Manager
Kate Randazzo is a Content Marketing Manager at Abrigo, where she works with industry thought leaders to create digital content that helps financial institutions better serve their customers. Before joining Abrigo, Kate managed social media and produced articles for Campbell University’s quarterly magazine and other university content initiatives. She earned

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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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