Board Member Hyland Keynotes
BSA/ USA Patriot Act Conference
December 18, 2006, Alexandria, VA – National Credit Union Administration (NCUA) Board Member Gigi Hyland delivered the Keynote address on Friday at a BSA/Patriot Act compliance conference sponsored by Credit Union Times and the Executive Enterprise Institute in Las Vegas, Nevada. Before an audience of credit union CEO’s, Supervisory Committee Members, CFO’s, and compliance officers, Board Member Hyland commended credit unions for their critical role in the ongoing war against terrorism and money laundering, and acknowledged the sacrifice and cost involved with BSA compliance. Hyland also highlighted key areas credit unions may improve BSA compliance.
During the Keynote address, titled, “Keeping the ‘B.S.’ out of BSA,” Board Member Hyland recalled the challenges faced with BSA compliance during her experience as Senior Vice President, General Counsel of Empire Corporate Federal Credit Union, “It’s no news that BSA compliance came screaming onto the scene with unparalleled vigor a few years ago,” stated Hyland. “After 9/11, with passage of the USA PATRIOT Act, there was renewed focus on curbing possible sources and flow of terrorist financing through the mechanism of BSA as well as enhanced FinCEN and OFAC regulations. As a person whose job it was to keep a corporate credit union compliant with all applicable regulations, my initial sense of this BSA storm was that the unprecedented onslaught of new requirements and obligations on financial institutions equated to an unattainable goal for credit unions. The lack of tangible guidance and detail on structuring or what constitutes ‘suspicious activity;’ the dearth of DORs related to BSA on credit union examinations; the enormous regulatory burden; and the uncertainty of where all these SARs were going and whether they were doing what they were supposed to do -- help catch the bad guys -- all contributed to my sense that there seemed to be quite a bit of ‘B.S.’ associated with BSA.”
During her Keynote address, Board Member Hyland highlighted three key ways to enhance BSA compliance:
- compliance;
- enhanced communication with NCUA;
- resource for idea-sharing and improvements through FFIEC
While addressing compliance best practices, Board Member Hyland encouraged credit unions to understand that the burden is shared throughout all segments of the financial services sector and emphasized that a careful and periodic risk-based assessment is the backbone for an effective and cost efficient BSA compliance program. She noted helpful guidance available, including FinCEN’s website and the BSA/AML Examination Manual. Hyland reminded the audience of the vital mission of protecting the reputation of the credit union system by continuing to maintain safety and soundness throughout BSA compliance.
While discussing the key area of enhanced communication between credit unions and NCUA, Hyland emphasized the importance of constructive dialogue with examiners on what is best for each credit union; providing all applicable support documents; and sharing individual stories on examinations with other credit unions.
In order to improve the overall system, Board Member Hyland highlighted the continuing dialogue within the FinCEN BSA Advisory Group and with the FFIEC. She reminded the audience of the upcoming August 1, 2007 deadline for mandatory compliance with the new SAR form, while emphasizing the importance for including all the information they have in the form. Hyland encouraged the use of helpful resources such as the SAR Activity Review, which summarizes the trends, tips and how law enforcement is using the information. Hyland assured the audience that NCUA is working diligently to improve the system and noted the agency’s participation on the BSA Advisory Group in order to share best practices and work to improve the system, including the effort to respond to the recent GAO study of federal financial regulators enforcement efforts.
NCUA charters and supervises the nation’s federal credit unions, and with the backing of the full faith and credit of the U.S. government NCUA also operates and manages the National Credit Union Share Insurance Fund, insuring the accounts of over 85 million account holders in all federal credit unions and the majority of state-chartered credit unions. NCUA is funded by credit unions, not tax dollars.
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