Four Sections Are Updated in the Fed’s BSA/AML Examination Manual

March 3, 2021 |

(From the CUNA Compliance Blog) – True to their word, the Federal Financial Institutions Examination Council (FFIEC), which consists of the federal and state financial regulatory agencies, has issued a second update to its BSA/AML Examination Manual in less than a year. (You may remember that the April 2020 Update was the first in six years and included 19 topics). NCUA told us at CUNA’s 2020 BSA eSchool that going forward we can expect more frequent updates covering fewer topics. This will allow FinCEN guidance to be incorporated into the Manual in a more timely manner.

The February 2021 update includes four topics:

  • A new introductory page to the Regulatory Requirement section
  • Revisions to the Customer Identify Program (CIP) section
  • Revisions to the Currency Transaction Reporting (CTR) section
  • Revisions to the Transactions of Exempt Persons section

The new introduction reminds financial institutions that they must comply with not only Part 1020 of the rule (Rules for Banks), but also the general provisions in Part 1010. This new section also points out that “written policies, procedures, and processes alone are not sufficient to comply with these other BSA regulatory requirements. Practices that correspond to the banks’ written policies, procedures, and processes are needed for implementation.”

The introduction also informs examiners that they must assess credit unions’ compliance with BSA regulatory requirements dependent upon the credit union’s:

  • Risk profile
  • Size or complexity
  • Quality of independent testing
  • Changes to the credit union’s BSA/AML compliance officer or department
  • Expansionary activities
  • New innovations and technologies
  • Other relevant factors

For the most part, the new revisions provide more concise explanations and take into account how the new beneficial owner rule impacts various parts of the regulations. You will also see FinCEN’s latest guidance incorporated into the CIP and CTR requirements. This manual provides instructions to examiners for assessing the adequacy of a credit union’s BSA/AML Compliance Program and its adherence to the BSA/AML regulations.

While the manual is heavily relied upon by credit unions to help clarify the compliance requirements and better understand what their examiners expect during an examination, it does not establish requirements, which are found only in the BSA/AML laws and regulations.

For more information: