Regarding the Dec. 12, 2007 article entitled "CUNA BSA Task Force Meets with NCUA Board Member Hyland, Head of FinCEN," I must respectfully disagree with the assumption that Bank Secrecy Act compliance absorbs a large share of credit unions' resources. Depending on the reliability of the member profiles and the aptitude of the staff, a credit union should be able to perform all necessary BSA requirements when employing the services of a BSA specialist. BSA specialists serve multiple institutions by acting as an independent arm of the CEO and Board of Directors who is an "as-needed resource" performing only those services necessary for compliance. The BSA specialist begins by assessing the institution's current program to identify any area lacking full compliance. The specialist then develops enhancements to current procedures to resolve any identified weakness and most importantly performs post-assessment reviews to assure full implementation of the enhanced procedures. For most institutions under $750 million the annual cost should not exceed $10,000 per year plus travel expenses. The larger institutions should consider employing a full-time experienced BSA officer if they encounter more than 100 Currency Transaction Report filings annually.
I have learned that most credit unions prefer employing their own full-time BSA/compliance officer or utilize expensive computer monitoring programs. Full-time BSA officers should be used only when the work justifies the position such as CUs with frequent currency transactions, accounts of money services businesses, politically exposed persons, or other unique situations requiring added oversight. My experience with computer monitoring software for BSA purposes is that they are administratively burdensome and require continuous updates of parameters to decrease false positives and identify missed reportable transactions. False positives can be especially problematic since the IRS uses filed currency reports for civil examination purposes and they are made available to law enforcement when performing their duties. Hopefully, each and every computer generated currency report is independently verified prior to sending to the Detroit Computer Center.
Finally, as a matter of "economy of scale," a fully engaged BSA specialist should be able to handle up to 10 credit unions, with total aggregate assets of less than $1 billion. Each new requirement or regulation would be researched by the BSA specialist only once but implemented at each of their CUs thus saving the institutions from performing them individually. For example, how many credit unions have reviewed or even read the new 59-page "Identity Theft Red Flag" regulations that must be implemented Nov. 1, 2008 which are more demanding that the Customer Identification Program requirements. As a BSA specialist I completed the task within six days of the final regulatory publication by informing each of my CUs of the new requirements, how to achieve them along with pertinent attachments with references, and hyperlinks to source documentation.
Hopefully I have presented the concept that BSA compliance need not be unduly expensive if "as needed" experts are used prudently. The BSA specialists could be the answer to credit unions that desire to become completely BSA compliant at a reasonable cost.
Lawrence R. Hart
Creative Compliance Solutions, LLC