Posted by John Byrne in AML Fraud and other things
John brings back highlights from ACAMS' Las Vegas conference
The anti-money-laundering community (regulators, law enforcement, and the financial sector) has always been a closed-knit group, willing to share information, work together, and debate in a professional manner. Those of us involved in the area since the beginning have always understood this fact, even if other parts of the industry did not.
Last week at the conference we heard from several speakers, from both the government and the private sector on how to remain prepared for AML challenges. I will leave to others the reporting on the program in extensive detail, but I’ve provided some highlights below.
Government speakers’ views
Here are some interesting government nuggets:
• Warning shots from FDIC. FDIC’s Debra Novak cautioned that the agency is concerned that BSA is getting less attention than it should from some institutions. She added that they are still seeing some violations on independent testing (a theme shared by many regulators).
• Review monitoring systems. Jonathan Polk, from the Federal Reserve Bank of New York, indicated that he hasn’t seen big gaps in AML programs, but did suggest a review of monitoring and other systems to adjust those tools so to limit the number of alerts that must be worked by banks. That theme—efficiency in reporting suspicious transactions—was shared by many in the private and public sector.
• FINCEN’s “spin.” FINCEN’s Jamal El-Hindi, associate director for regulatory policy and programs, outlined a number of major initiatives that have been finalized in 2009, but jokingly bemoaned the fact that the “casino guidance” developed by his agency is due shortly but not in time for a Las Vegas unveiling.
• Beware post-merger falldown. A number of government representatives did stress the importance of AML training and recommended that after a merger or acquisition, it was important to review the existing training since it may no longer be adequate.
• Outsource BSA hat? There was also an interesting exchange concerning outsourcing with a government conference registrant asking colleagues from the floor whether it was permissible for a bank to outsource the BSA Officer position. While I personally think this is a bad idea, there was no official consensus on the panel.
• FINRA fundamentals. The representative of the Financial Regulatory Authority, Sheila Haney, stressed the importance of reviewing their website (www.finra.org) to determine if broker-dealers have been barred for AML violations. She also emphasized that FINRA is still focused on BSA exams. Also, the AML small-firm template is being updated.
Private sector viewpoints
From the private sector there were a number of interesting presentations and discussions during roundtables. The combination of US and international speakers often made for interesting information sharing.
• Merging AML and anti-fraud functions. Peter Hazlewood from DBS Bank covered the theme that all of us grapple with—integrating AML and Fraud prevention. Peter used a clever phrase—“territorial thinking”—to describe the age-old battle between AML and Corporate Security that has prevented the merger of these two disciplines. Hazlewood recommended several procedural changes to move toward the integration of these two areas, such as an uncomplicated suspicious activity escalation process; a single clearinghouse for issues; and one case management program for the enterprise.
• Terrorist financing. Jimmy Gurule, former Treasury Under Secretary of Enforcement, made the point that we are returning to a time when criminal activity such as terrorism is being funded by narco-dollars. Gurule, now a Notre Dame Law School professor (which I won’t hold against him as a Marquette alum who loves when we beat ND in basketball) pointed out some fascinating facts. Here’s an example: 93% of the opium in the world comes from Afghanistan and that the Taliban is able to conveniently ignore religious tenets against drug dealing by protecting opium fields for a fee. The fee funds terrorism.
• Internet gambling regulatory compliance. While not an AML issue per se, this is important because AML officials will most likely be tasked with compliance responsibilities (Note: There is a last minute push by a an actual bi-partisan group in Congress to delay the effective date of that regulation, so stay tuned).
All in all, the value of networking coupled with the cooperative training done by the government and the industry makes it clear that we all benefit by working together.
So those in Vegas are hopefully bringing their new found knowledge back to their offices. For more information, see www.acams.org
* Association of Certified Anti-Money Laundering Specialists
My next posting will cover the ABA/ABA Money Laundering Enforcement Conference.
About John Byrne, CAMS
Byrne leads Condor Consulting LLC, a Washington, D.C., area financial services consulting firm specializing in regulatory management, AML, privacy, and a vast array of financial institution compliance related issues. He has written extensively on AML issues for 25 years and has appeared on television and testified before many congressional committees on AML-related policy issues. Prior to the creation of his firm, John was the Global Regulatory Relations Executive at Bank of America. Previously, he worked for the American Bankers Association for 22 years and was responsible for ABA's lobbying, regulatory, and educational efforts on money laundering, and other compliance issues. He received the ABA's Distinguished Services Award and was also the first private sector recipient of the “Director's Medal for Exceptional Service” from the Treasury Department's Financial Crimes Enforcement Network (FinCEN). Byrne can be e-mailed at firstname.lastname@example.org. His web page can be found at www.thecondorconsultingllc.com
Community Bank Compliance Officers: Be sure to check out our other compliance blog, "Lucy and Nancy's Common Sense Compliance." Lucy Griffin and Nancy Derr-Castiglione, ABA BJ contributing editors, address compliance challenges with the smaller bank in mind. Check it out!
Compliance Officers: Don't miss ABA BJ's online coverage of ABA's 2009 Regulatory Compliance Conference. Click here
For ABA Member Banks Only: Get regular compliance news updates with ABA's Compliance Source E-Letter
ABA member-bank employees have access to almost three dozen ABA news and information e-bulletins on important industry topics. One e-bulletin, THE Compliance Source, is dedicated to becoming your source for compliance information in the electronic world. Compliance Source is published each Monday throughout the year. In this changing regulatory environment, every compliance professional should subscribe THE Compliance Source. It will link you to recent compliance developments and alert you to upcoming compliance events. In addition to regular sections on "What's New in Review" and "On the Compliance Horizon," THE Compliance Source will have rotating sections including analysis of compliance issues by ABA staff in the "ABA Reports" section.
For a sample newsletter, click here.To subscribe, click here