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FinCen continues effort for BSA clarity
WASHINGTON (10/23/08)—As part of the Financial Crimes Enforcement Network’s (FinCEN’s) ongoing effort to provide feedback on Bank Secrecy Act (BSA) enforcement to those the agency regulates, Director James Freis recently offered what he termed “explicit clarity on the purpose and conduct of FinCEN’s enforcement program.” Freis said that misperceptions about enforcement matters will “erode the trust and confidence in our financial system that the BSA seeks to protect.” He reiterated that it is FinCEN’s general policy to reserve civil money penalties for the “most significant and systemic violations of the BSA.” In fact, he added, over the past two years FinCEN has assessed only eight civil money penalties and just three of them have been against banks. “To put these figures into context, there are tens-of-thousands of financial institutions subject to the BSA, including over 17,000 depository institutions,” he said. “While lesser BSA infractions should not be ignored, FinCEN has other vehicles to address these deficiencies outside of the context of enforcement,” Freis said. He made his remarks at a money laundering enforcement conference here, sponsored by the American Bankers Association. The FinCEN director said that his agency’s efforts to make its processes more transparent are intended to help depository institutions allocate resources in a manner commensurate with their actual money laundering and terrorist financing risks. He said FinCEN fully recognizes that even a “reasonably designed” compliance program will occasionally suffer from minor and isolated compliance deficiencies. “Good faith efforts to establish, implement, and maintain a sound BSA compliance program and to prevent money laundering and terrorist financing, will not result in the assessment of penalties. However, he added, if a financial institution fails to establish and maintain a reasonably designed anti-money laundering program to ensure compliance with the BSA, or deprives law enforcement of valuable information by failing to report currency and suspicious transactions in accordance with the law or regulation; FinCEN may assess penalties under the provisions of the BSA. Freis said his agency will continue to work toward improved BSA compliance on a national basis and noted an upcoming Chapter X initiative to provide a simplified, centralized and industry-specific codification of the BSA for different segments of the financial services industries. The Credit Union National Assocation expects a Notice of Proposed Rulemaking on Chapter X to be issued in the next few days with an extended comment period.
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