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ALEXANDRIA, Va.-In a Letter to Credit Unions, NCUA Chairman Dennis Dollar reminded all federally insured credit unions that they must be on the look out for possible terrorist financing through credit unions. The Financial Action Task Force on Money Laundering (FATF) recently issued guidance in identifying and detecting potential terrorist financing. The guidance, which is enclosed with the letter, notes that it is difficult for financial services providers to detect terrorist funds separate from criminal activity and, therefore, credit unions must focus on “transactions that are unusual, suspicious, or otherwise indicative of criminal or terrorist activity.” Only when a known terrorist organization opens an account can an institution positively determine terrorist financing, according to the letter. The guidance includes lists of characteristics linked to terrorist activity. “When observing one or more of these characteristics in accounts at your credit union, extra consideration should be given to reporting the suspicious activity,” the letter said. It also reminded, “Failure to effectively monitor such activity exposes a credit union to compliance and reputation risks. Closely following suspicious activity reporting requirements and supplementing those requirements with this FATF guidance can help deter those risks.”

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