The BSA/AML Interagency Exam manual addresses lending within
its coverage and a key examiner focus is the following: “Assess
the adequacy of the bank’s systems to manage the risks
associated with lending activities, and management’s ability to
implement effective due diligence, monitoring, and reporting
systems.”
Lending activities include, but are not limited to,
residential and commercial real estate, secured commercial
loans, credit cards, consumer, commercial, and agricultural
loans.
Lending activities can include multiple parties (e.g.,
guarantors, signatories, principals, or loan participants). The
new 5th Pillar CDD rule takes particular aim at commercial
lending and turns implied guidance into express regulations. The
BSA considers all loans, whether they be residential,
commercial, consumer, etc to be “accounts” and subject to the
CIP requirements and applicable to SAR and CTR reporting.
A number of the BSA examiners “grew up” in the Safety and
Soundness world and are particularly adept in identifying
BSA-related deficiencies in the commercial lending area and
therefore find lax controls in the commercial lending area
because some commercial lenders believe that the BSA is a
compliance regulation and doesn’t apply to commercial loans.
Additionally, many banks still have BSA training programs
primarily tailored to consumer deposit accounts and do not
provide sufficient training for lending-related situations.
This two-hour program will assist your bank in determining
whether your BSA Compliance Program adequately includes
controls, such as training, policies and procedures, monitoring,
etc for loan products in addition to deposit products. It will
also teach you how to conduct due diligence on related account
parties (i.e., guarantors, signatories, or principals) as well
as beneficial owners.
Covered Topics:
- Commercial and residential mortgage loan money
laundering schemes identified by FinCEN through a
10-year study of SARs;
- Lending Red Flags, including those addressed in the
BSA Exam Manual and many more
- Customer Due Diligence (CDD) and, Enhanced Due
Diligence (EDD) expectations regarding loans;
- Beneficial Ownership identification and verification
requirements for Legal Entity Customers;
- How to develop customer risk profiles and conduct
ongoing risk-based monitoring for loan products;
- SAR and CTR reporting requirements; and
- Portions of your BSA Policy/Program that need to
address lending.
Who Should Attend?
The program is designed for Commercial Loan Officers,
Commercial Operations Personnel, BSA Officers, Compliance
Officers, Auditors, and those responsible for either
overseeing BSA in general or those within the lending business
units with BSA responsibilities.
Instructor
Carl Pry is a Certified Regulatory
Compliance Manager (CRCM) and Certified Risk Professional (CRP) who is
a Managing Director for Treliant Risk Advisors in Washington, DC.
Through his working career, as well as through his experience as a
banking attorney and officer, he has provided a variety of regulatory
compliance and financial performance services to financial
institutions and other clients throughout the country.
He has written extensively regarding consumer and commercial
compliance, tax, audit, and financial institution legal issues, and is
a frequent contributor to and currently serves on the Editorial
Advisory Board for the ABA Bank Compliance magazine. He has spoken at
scores of banking, compliance, and state bar associations, and has
conducted training sessions for financial institutions across the
country.
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