FDIC Issues Consent Order Against Kansas Bank Relating to BSA/AML Compliance

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The FDIC recently issued a consent order against a Kansas-based bank relating to alleged violations of the Bank Secrecy Act (BSA). 

Pursuant to the consent order, among other things, the bank was ordered to (i) cease all activity related to its foreign financial institution customers, including but not limited to funds transfers, remote deposit capture, money service business remittances, Automated Clearing House transfers, and funds transfers to or from any foreign central bank accounts; (ii) establish a Board of Directors’ BSA/anti-money laundering (AML) compliance committee; (iii) implement an updated written BSA/AML compliance program to address BSA/AML deficiencies, including incorporating internal controls to ensure ongoing compliance, independent testing for BSA/AML compliance program, a designated individual responsible for coordinating and monitoring BSA/AML compliance, and training for appropriate personnel; (iv) maintain an adequate BSA/AML internal control structure, including suspicious activity monitoring and reporting, risk assessment, and customer due diligence; (v) implement an independent test (audit) pillar of the BSA/AML compliance program, and contract with a third-party consulting firm to conduct such testing; (vi) ensure that the bank has a qualified and experienced BSA Officer with the sole responsibility to oversee the BSA/AML compliance program; (vii) develop a comprehensive training program for all Board members, officers, BSA/AML compliance personal, and certain additional personnel regarding specific compliance responsibilities; and (viii) engage a consultant to conduct an account and transaction suspicious activity review (look-back review).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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