FinCEN News: Streamlined Systems

FinCEN Director James Freis made the announcement during a presentation at the American Banker’s Association Anti Money Laundering Conference in Washington, D.C. last week. He said that in July federal functional regulators had set their agencies’ policies to enforce specific anti-money laundering requirements.

“This was done to provide greater consistency among the agencies in enforcement decisions in BSA-related matters and to provide you with greater insight into the considerations that form the basis of those decisions,” Freis said. “While this did not relate to FinCEN's own authorities, it reflects one of the many authorities available to government agencies responsible for BSA/AML compliance issues.”

In November, FinCEN will update its information sharing systems to enable the industry to more readily demonstrate to regulators their compliance with specifically requested searches of databases by FinCEN on behalf of law enforcement under section 314 (a) of the PATRIOT Act. The new functionality provides financial institutions the option to verify that they searched 314(a) subject information against their records and generate a report to record that verification, Freis said.

This enhancement is designed to ease the obligation of compliance verification relating to 314(a) search requirements. “By making available the option for institutions to print a search verification for each 314(a) distribution, search compliance documentation can be provided to examiners in a stream-lined process, which will reduce the current record-retention load some institutions experience,” he noted. This option will also assist those institutions that utilize third-party vendors to perform their searches in providing examiners with proof of compliance.

The printed verification is not the only source of search compliance available. In addition, the institution's verification is stored in FinCEN's databases and is available for reporting purposes for the institutions, examiners and regulators. This will help ease the examination process for all parties.

Testing is scheduled for one to two transmissions with a selected number of institutions beginning in October. “If all goes as planned in the testing phases, our goal is to implement this new enhancement with the November 20 transmission,” Freis said. Prior to implementation, information on this new enhancement will be posted on SISS under the "What's New" and "Answers to Your Questions" links. Freis said it is important to note that industry suggested this change, and “when FinCEN looked at it we thought it made sense.”