The Bank Secrecy Act Flashcards
What is The Bank Secrecy Act
Authorizes the Department of the Treasury to impose reporting and other requirements on financial institutions and other businesses to help detect and prevent money laundering
Who enforces the Bank Secrecy Act?
Financial Crimes Enforcement Network (FinCEN)
per the USA PATRIOT ACT
Define: BSA
The Back Secrecy Act
Scoo
Scope of the Bank Secrecy Act
Applies to financial institutions which include, among other entities:
- Banks
- Securities brokers or dealers
- Entities engaged in money services
- Casinos
- Loans or finance companies, which include mortgage entity licensees and individual loan originators
What does AML mean?
Anti-Money Laundering
Define: Anti-money laundering
A set of policies and practices to ensure that financial institutions and other regulated entities prevent, detect, and report financial crime and especially money laundering activities
Define: Money laundering
Disguising financial assets so they can be used without detection of the illegal activity that produced them
Anti-money laundering program
The BSA requires a financial institution to develop and implement a written anti-money laundering program that is reasonably designed to prevent the institution from being used to facilitate money laundering or the financing of terrorist activities.
An anti-money laundering program must be approved by senior management and a copy made available to FinCEN.
An AML program must:
- Institute policies and procedures, based on its risk assessment, to detect money laundering and possible terrorist financing
- Designate a compliance officer to ensure the AML program is implemented effectively and updated regularly or as necessary
- Provide for **education and training **related to the AML program for the entity’s employees
- Provide for ongoing training of staff with regards to their responsibilities under the program
- Ensure independent testing to monitor and maintain the program, the frequency of which should be based on the entity’s risk assessment
Suspicious Activity Report
A covered financial institution, residential mortgage lender or originator, or any other covered entity must submit a Suspicious Activity Report (SAR) if it believes there is a possibility that a violation of the law is occurring or has occurred.
A SAR must be submitted within 30 days of detection of a possible violation if the covered institution detects
- Criminal violations that
- Involve insider abuse in any amount
- Total $5,000 or more if a suspect can be identified, or
- Total $25,000 or more, whether a suspect is identified or not
- Transactions that total $5,000 or more if the bank knows or suspects that the transaction:
- May involve money laundering or other criminal activity
- Attempts to evade the BSA
- Has no legitimate purpose, or
- Is not typical for the customer
Other than to FinCEN, a loan or finance company may not disclose a SAR or reveal that one has been filed
What does SAR mean?
Suspicious Activity Report
What does CTR mean?
Currency Transaction Report
Currency Transaction Report
A financial institution must report to FinCEN any single or structured currency transactions which exceed $10,000 in a single day.
This is reported on a Currency Transaction Report (CTR).
A CTR must be filed within 15 days of a reportable transaction and a copy retained in its records for at least five years
Define: Currency transaction
A currency transaction is any deposit, withdrawal, exchange, or other payment or transfer that involves currency.
Define: Currency
The money or official means of payment in a country or region.
For AML purposes, currency includes
* bank notes
* coins
* some cash equivalents
* money orders
* debit cards
