BSA/AML Manual

BSA COMPLIANCE OFFICER EXAMINATION PROCEDURES

Objective: Confirm that the bank’s board of directors has designated a qualified individual or individuals (BSA compliance officer) responsible for coordinating and monitoring day-to-day compliance with BSA regulatory requirements. Determine whether the BSA compliance officer has the appropriate authority, independence, access to resources, and competence to effectively execute all duties.

1. Confirm that the bank’s board of directors has designated an individual or individuals responsible for the overall BSA/AML compliance program.
2. Confirm that the BSA compliance officer regularly updates the board of directors and senior management about the status of ongoing compliance with the BSA and pertinent BSA-related information, including the required notification of SAR filings.
3. Determine whether the BSA compliance officer is competent, as demonstrated by knowledge of the BSA and related regulations, implementation of the bank’s BSA/AML compliance program, and understanding of the bank’s ML/TF and other illicit financial activity risk profile associated with its banking activities.
4. Determine whether the BSA compliance officer has the appropriate authority.
5. Determine whether the BSA compliance officer has the appropriate independence. Indicators of appropriate independence may include, but are not limited to:
   • Clear lines of reporting and communication ultimately up to the board of directors, or a designated board committee, that do not compromise the BSA compliance officer’s independence.
   • The ability to undertake the BSA compliance officer’s role without undue influence from the bank’s business lines.
   • Identification and reporting of issues to senior management and the board of directors.
6. Determine whether the BSA compliance officer has access to suitable resources. Indicators of suitable resources may include, but are not limited to:
   • Adequate staffing with the skills and expertise for the bank’s overall risk level (based on products, services, customers, and geographic locations), size or complexity, and organizational structure.
   • Systems to support the identification, measurement, monitoring, reporting, and management of the bank’s ML/TF and other illicit financial activity risks.