Regulators Planning Future Updates to BSA/AML Examination Manual

Regulators are currently “in the process of reviewing another update” to the BSA/AML examination manual, Lisa Arquette, associate director of the FDIC’s division of risk management told attendees at the ABA/ABA Financial Crimes Enforcement Conference today. The agencies issued previous updates to the manual—the first since 2014—earlier this year that provided instructions to examiner for tailoring BSA/AML examinations to a bank’s risk profile, assessing the adequacy of an institution’s BSA/AML compliance program, assessing a bank’s BSA/AML risk assessment processes, and developing conclusions and finalizing the exam.

“Our objective is to move this forward as quickly as possible,” Arquette said, but “we have been very cautious about the words we’ve used because we don’t want to in any way issue something that would have unintended consequences.” She said that the agencies would issue updates “on a rolling basis, and then when we have several chapters that have been issued, you’re going to see maybe another press release or financial institution letter.” She added that the agencies would communicate changes via webinars for examiners and bankers, emphasizing that “the message will be delivered to examiners and bankers by the same people.”

The additional updates will continue to emphasize that minor weaknesses, deficiencies, and technical violations are not indicative of an inadequate program, added Suzanne Williams, deputy associate director at the Federal Reserve. Williams also noted that when designing a BSA/AML program, “there’s a variety of different approaches and methods that… can be perfectly fine and meet the bank’s needs. Those are some other themes that we tried to bring out in the updates and we’ll be continuing to emphasize in the revised chapters you will be seeing.”