Five Things to Consider For Non-Bank AML Policies

BSA/AML compliance is an important part of any financial institution’s operations. However, it’s important to note that the definition for a financial institution that applies to these regulations goes beyond just banks. For instance, casinos, insurance companies, or precious metal dealers all fall into what the Federal Financial Institutions Examination Council (FFIEC) calls nonbank financial institutions (an NBFI). Even a grocery store that cashes checks should be aware of BSA regulations.

No one program fits every business, and nonbank financial institutions may have additional concerns for risk management and BSA/MLA compliance. At Bates Group LLC, our compliance experts can work with your business to identify gaps in compliance programs with the goal of developing effective policies and procedures. 

What is the Bank Secrecy Act?

Bank Secrecy Act / Anti-Money Laundering compliance refers to a series of regulations that are intended to promote transparency from financial institutions to prevent money laundering, funding of terrorism, and other financial crimes. In general, developing a program for BSA/AML compliance involves assessing risks to the financial institution in question, creating policies and procedures, and compliance training, although the exact structure of the program will vary from business to business.

Additional Considerations for Financial Institutions

For non-bank institutions that are required to follow BSA/AML regulations, developing a compliance program may come with additional considerations for your individual business and circumstance. 

• Record Keeping: One risk some NBFIs face when it comes to BSA compliance is record keeping. In particular, it may be more difficult to identify money laundering activity when little information is required from customers, and an ongoing relationship with those customers is not established. Recordkeeping is an important part of BSA compliance, and it may be helpful to ask an expert how this works into your BSA compliance program.

• Policies and Procedures: Not only is it important to keep up to date with current regulations, but regular training may be necessary to keep employees up to date on relevant policies. 

• Registration: According to the American Bar Association, Money Services Businesses (MSBs) need to register with FinCEN and sometimes with the state in which they do business. Set featured image

• Knowing Reporting Requirements: It’s also important for NBFIs to be familiar with what types of transactions should be reported, and how long that information must be kept. Notably, FinCEN requires reports of transactions over $10,000 or that could somehow indicate criminal activities. 

• Changes in Business Operation: As noted by the FFIEC, some businesses can quickly change their operations, which may open them up to additional risk. When changing the products or services that your business offers, further considerations may be needed for BSA compliance. 

These statements are general, and may not account for changes in regulation. To make sure that your business is up to date on current BSA/AML compliance requirements, you may wish to consult a professional. 

BSA/AML Compliance Services with Bates Group LLC

If your nonbank financial institution is in need of assistance with AML policies, an expert may be able to help. The compliance experts at Bates Group LLC can advise you on developing a BSA compliance program that is appropriate for your business. To schedule a consultation, contact us today.