BSA/AML Top Gun Conference
March 7 - 8, 2023 All times are relative to
EASTERN Standard Time
Conference begins each day at the specified time which is dependent on which time-zone you reside in.
10:00am - 6:00pm Eastern Time
9:00am - 5:00pm Central Time
8:00am - 4:00pm Mountain Time
7:00am - 3:00pm Pacific Time
What Happened Since Last Year?
Organized Retail Crime: Beyond Smash and Grabs
2022 was a year of "Hurry up and wait." FinCEN issued a final rule for the Corporate Transparency Act that identifies which legal entities will be required to register their beneficial owners with the as of yet undeveloped national database, but we have seen little movement on the other areas. Your Top Gun speakers will be monitoring FinCEN's activities right up to the conference date to ensure you get the most current updates. We will also cover major events in the last year in the world of BSA so that you have the information you need to manage emerging risks at your institution.
Will the national beneficial ownership database replace certifications at account opening?
Based on recent enforcement actions, what are the areas of greatest risk for our program?
Are we expecting any new rules to be issued in 2023?
The Intersection Between the Compliance and BSA Departments
Depending on the size of your institution, the Compliance and BSA Departments may be one and the same or distant cousins. Regardless of how your institution is organized, there are lessons to be learned from a Compliance Management System for putting together a strong BSA Program that satisfies the Five Pillars and has "buy in" from the institution's business lines. The BSA officer can't do this alone! In this session we will discuss strategies for ensuring that your Program establishes a culture of compliance throughout the organization.
What Did We Learn from the FTX Collapse?
- How can I effect change in departments that don't report to me?
- When should I get senior management involved in a disagreement?
- What are some warning signs that our BSA Program is not working?
A view from the outside might lead someone to question the solvency of cryptocurrency when we see major exchanges such as Mt. Gox failure in 2014 and the FTX catastrophe in 2022. However, the underlying issues with both go much deeper than cryptocurrency. In this session we will follow the law enforcement investigations into what led to the exchange's demise and the warning signs that were there before the collapse.
Providing services to the Cryptocurrency Industry
- Should we be concerned about a customer who we so conducting cryptocurrency transactions?
- Is cryptocurrency safe?
- How has US law evolved because of FTX?
The prudential regulators have issued guidance to assist financial institutions that choose to provide services to the cryptocurrency industry. Your institution's risk tolerance should be clearly stated in your risk assessment and BSA Policy and approved by your Board. In this session we will discuss the potential services (with varying levels of risk) and best practices for managing that risk. We will also discuss current positions on cryptocurrency from the US Government, including the IRS, SEC, and the status of a national cryptocurrency.
Does your Sanctions Program Need an Upgrade?
- What are the risks if we have a customer investing in cryptocurrency?
- Our online banking vendor wants to offer a link for customers to purchase cryptocurrency through a third party. What are our compliance responsibilities
- What steps do we need to take to set up a cryptocurrency ATM?
Every financial institution has some degree of risk associated with processing transactions that could be subject to Office of Foreign Asset Control sanctions lists. Even institutions that have minimal international activity likely saw an increase in risk in the last year as the United States issued an unprecedented number of sanctions orders in response to the Russian invasion of Ukraine. The sanctions came with various effective dates, several licenses, and targeted transaction types rather than just individual or business names. In this session we will explore how risk has evolved and what you should consider for transaction screening, and review recent OFAC enforcement actions to see where mistakes can happen.
Elder Financial Exploitation
- Can we refuse to process a transaction for a customer if we have questions regarding a potential OFAC match or the region involved in the transaction?
- What do we do if there isn't enough information in an ACH batch or wire instructions to determine if we have a match?
- What lists are we required to search?
A consequence of COVID isolation is that the volume of online and phone scams significantly increased. Senior citizens and other at-risk individuals were often targeted because they had less contact with family and friends that would help to protect them from financial predators. BSA officers often struggle to manage potential elder abuse cases because state laws vary on what is required. Business lines may be reluctant to refer suspicious activity for fear of causing additional harm to the at-risk customer. Additionally, the institution may struggle with what steps to take if an at-risk person requests a transaction the institution believes may be connected to fraud. In this session we will cover elder abuse red flags and what steps you should consider when protecting the institution and the customer.
Beneficial Ownership Update
- Can we refuse to approve a loan if we suspect elder abuse even if the customer qualifies?
- Should we freeze an at-risk customer's account if we suspect fraud?
- Are there requirements we must follow if we want to close an at-risk customer's account?
Slowly but surely, FinCEN is making progress implementing the Corporate Transparency Act. It finalized the first phase by defining who needs to submit beneficial ownership information and within what timeframes. In January 2023, now proposals dropped for how information should be submitted with comment periods for the reporting companies to submit their feedback. The third and final phase (which is the most important to financial institutions) has yet to be published. We will provide the most current information in this session on what you should be thinking about and preparing for now based on the most recent developments.
- Do we still need to collect beneficial ownership information since FinCEN is going to start doing it?
- When can we expect a final rule?
- What do these rules mean for our institution?
Organized Theft Groups (OTG) and Organized Retail Crime (ORC) involves different typologies at different levels of the criminal syndicate. Boosters? Fences? Diverters? ORC illicit activity goes beyond just theft and can play a larger role within the organized criminal underworld and FinCEN's AML/CFT National Priorities, such as with transactional criminal organizations, fraud, human trafficking, and terrorist financing. This session will analyze the OTG and ORC red flag indicators to identify and report suspicious activity utilizing target key terms, including case study analysis.
Next Level Due Diligence Investigations
- What red flags should we consider when trying to identify accounts connected to organized crime?
- Are there automated monitoring system parameters that you recommend to help identify activity related to the AML/CFT priorities?
- FinCEN hasn't published any rules relating to the AML/CFT priorities. What should we be doing now?
As criminals diversify their illicit proceeds, when do we take our anti-financial crime (AFC) investigations to the next level with due diligence and analysis? Moving from CDD and EDD to NLDD (Next Level Due Diligence), this session will explore various investigation typologies and techniques that will elevate any investigation analysis, including SAR narratives. In doing so, not only will our audit and regulatory partners look favorably at this new robust, thorough review process, but our law enforcement partners may produce much more efficient results when performing their intelligence data triage.
Partnering with Fintechs
- How much due diligence is enough?
- Do we have to collect the same type of information for every high risk customer?
- How do we support our conclusion?
As competition for customers increases and interest rate margins shrink in a rising rate environment, institutions may seek to expand beyond their traditional branch network and reach customers online by partnering with fintechs that offer a variety of services. Regulators have issued guidance on managing third-party risk when products and services are offered through outside businesses. In addition to consumer compliance risks, these partnerships can present BSA and OFAC risks. In this session we will discuss the various risks that fintech partnerships pose and compliance considerations for managing the relationships.
What Keeps the BSA Officer Up at Night?
- If we sponsor a fintech into the Visa/Mastercard network to issue prepaid access cards, are we responsible for BSA Compliance or is the fintech?
- What contractual considerations should we consider to protect ourselves?
- What due diligence should we collect from a fintech?
Whether it is an upcoming audit or exam, a new product roll-out, or their risk tolerance doesn't align with the board and executive management's risk tolerance, every BSA officer faces challenges from time to time that cause some sleepless nights. In this session, we will tackle some of the bigger BSA issues that crop up in even the experienced BSA professional's mind.
- Management wants to reduce my staff. How do I convince them that the risk is too great?
- What information do I really need to include in the annual board training?
- How should I prepare for the new rules FinCEN will be putting out in the next few years?
Our rapid-fire session is back. Our panel of BSA experts will take the topics that you submit in advance and share our thoughts on the challenges that you are facing with day-to-day BSA compliance.
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