WASHINGTONComptroller of the Currency John C. Dugan said today that the OCC is committed to a process of Bank Secrecy Act and Anti-Money Laundering (BSA/AML) supervision and enforcement that is not only effective, but also measured and fair.
The post9/11 world is profoundly different in many ways
from what it used to be, and that is certainly true in the BSA area,
Comptroller Dugan said in a speech before a money laundering conference
sponsored jointly by the American Bankers Association and the American Bar
Association.
Whether we like it or not, the traditional concerns of BSA,
that, disrupting the money flow of the drug trade and other illicit activity,
have been joined with concerns about combating the financing of terrorism, he
said.
Mr. Dugan said that neither banks nor regulators could
afford to adopt a casual approach to BSA compliance and offered a four-step
approach for banks to meet their BSA/AML responsibilities:
- Establish
a culture of compliance that begins at the very top and permeates all
layers of the organization. It is
absolutely necessary that a banks commitment to BSA/AML compliance start
at the board and senior management level, and run through all levels and
departments of the institution.
- Know
the institutions risks. While
different approaches may be appropriate for different institutions, it
should begin with a thorough and honest assessment of the banks products,
customers, and service area.
- Design
and implement a BSA/AML compliance program that is commensurate with the
banks risks. This is the most
critical element of an effective BSA/AML program and an area in which one
size does not fit all.
- Pay
attention to the examiners.
Bankers should always feel free to ask questions, provide feedback,
and even challenge an examiners conclusion through appropriate
channels. But when those avenues
have been exhausted, and an examiners criticisms have been reduced to
some form of supervisory warning, failing to correct the problem will only
result in stronger and more forceful supervisory action.
Mr. Dugan said that the OCC has embarked on a comprehensive
review of its supervision to better understand where weaknesses existed, and
how to improve them. Although the
review is still underway, he described three initiatives that the OCC has
already undertaken.
First, the OCC has developed methods for enhanced risk
assessment of a banks products, customers, and geographies. Second, the OCC is applying the new uniform
examination procedures in all examinations.
Third, the OCC has adopted improved processes to identify and correct
deficiencies and weaknesses and to initiate enforcement actions when
appropriate.
Mr. Dugan said that the fight against money laundering and
terrorist financing is a marathon, not a sprint, and there is no finish line.
Bankers and regulators share in a common goal of better BSA/AML supervision and
compliance and both are committed to work together to achieve that goal, he
added.
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