NEWS

FinCEN Details Anti-Money Laundering Trends at Large U.S. Banks

By Laura Spadanuta

The Financial Crimes Enforcement Network (FinCEN) has released a report on how the United States' largest depository institutions conduct their Bank Secrecy Act (BSA) and anti-money laundering (AML) programs.

According to the report:

  • most banks have highly developed AML programs
  • technology is the primary cost-driver of the banks' AML programs
  • many banks risk-rate clients and countries during risk assessment and due diligence, while some also risk-rate their own employees
  • banks have account closure procedures based on actions that lead to suspicious activity report (SAR) filings; many automatically close accounts after two SAR filings
  • several banks noticed an increase in fraud-related SARs, including mortgage loan fraud, home equity loan fraud, and credit card fraud
  • many banks conduct manual monitoring of accounts with financial intelligence units
  • the level of satisfaction with transaction monitoring tools varied by bank

The report also noted some issues raised by the banks in the study.  These included concerns about roadblocks to sharing of SARs between institutions, the lack of standardized country risk ratings that can be used for AML monitoring, and confusion and concern about the 30-day filing period for a SAR.

According to an article from Bank Information Security, FinCEN Director James Freis recently said of theproject, "As a result of this dialogue, law enforcement investigators and regulators will receive increasingly better information to act against financial crime and illicit activities."

FinCEN plans on carrying out a similar outreach survey of money services businesses. 

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