Anti-Money Laundering Compliance for New York Banks

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Anti-Money Laundering Compliance for New York Banks

There was a time when financial institutions in New York assumed that compliance with the federal Bank Secrecy Act (BSA) and anti-money laundering (AML) regulations would be enough to satisfy state-level compliance. However, in recent years, the New York Department of Financial Services (NYDFS) introduced new anti-money laundering regulations that have stricter requirements than at the federal level. 

These updated regulations require new transaction filtering and monitoring requirements, as well as the annual certification of each institution’s BSA/AML compliance program by a senior officer or board member. These compliance obligations apply to all banks, savings banks, private bankers, trust companies, and savings and loan associations chartered in accordance with New York banking laws. They can also apply to check cashers and other non-bank licensed money transmitters. 

If you are a New York banking financial institution subject to the updated state anti-money laundering regulations, you might need assistance with compliance and the development of AML policies and programs. The BSA/AML specialists at Bates Group LLC, are here to assist you with a wide range of compliance issues, so please contact us for a consultation today. 

Compliance Certification Requirements

New York now requires a senior officer, one of the board of directors, or the chief compliance officer to certify the AML compliance of the bank each year. The individual designated to certify the compliance programs of each institution must make sure the program meets all the requirements under the BSA and New York state regulations – otherwise, they might have to take individual responsibility for the certification of inadequate policies and programs. 

Transaction Monitoring and Filtering

Another requirement in New York that goes above and beyond federal regulations is for all regulated financial institutions to create and implement programs that monitor and filter all transactions. Each program must have attributes “applicable” to the operations of the bank, which can be a vague standard. It is important to consult with a compliance specialist when designing your systems to try to comply with New York law. 

The filtering and monitoring systems can be manual or automated, though they should “to the extent applicable”:

  • Identify data sources and validate data accuracy and integrity 
  • Have processes to ensure accurate and complete data transfers
  • Have procedures and policies regarding management and oversight of the programs, as well as changes to existing programs
  • Have a specific vendor selection process
  • Have appropriate funding
  • Have qualified individuals on hand to develop, implement, test, manage, and review the programs
  • Conduct proper training on the programs

This is only one of the newest aspects of anti-money laundering requirements in New York, as companies must still comply with previously existing state regulations and the BSA. It should be no surprise that AML compliance in the Empire State is a challenging feat, and professional consultants can assist your institution significantly. 

Learn How Our Specialists Assist with Anti-Money Laundering Compliance for New York Banks

If you have questions or concerns about anti-money laundering compliance for New York banks, consult with our expert compliance team at Bates Group LLC. Please contact us to discuss our services today.

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