MSBs/NBFIs: Doing it Right

Presented by:
Ken Golliher

Overview:
Interagency guidance issued clarifies a bank's responsibility for identifying and classifying risks posed by non bank financial institution (NBFI) customers. The potential for these customers being classified as "high risk" reflects the possibility that these businesses, like banks, can be used to facilitate money laundering and terrorist financing.

Agency expectations are now even more specific when the NBFI crosses a regulatory threshold and becomes a "Money Service Business" (MSB). MSB's must register with FinCEN and maintain Bank Secrecy Act (BSA) compliance programs. Depositary banks are not required to verify an MSB's full compliance with the law, but those who bank MSBs still have significant responsibilities. At a minimum, banks are expected to verify any required state licensure as well as registration with FinCEN. In addition, they are to perform a risk assessment on the customer in order to develop an appropriate monitoring program.

Conducting and documenting the required risk assessment on NBFIs and MSBs (as well as other individuals and entities "of interest") is a focal point of the recently revised BSA/AML examination procedures. Identification of all high risk customers is also an essential prerequisite to performing the bank's "risk assessment," another focal point in the revised examination procedures. This program was presented on BOL earlier this year and is being re-presented due to continuing interest in bank-MSB compliance issues.

The webinar focuses on the expectations of the regulatory agencies; i.e. what they expect to see in bank compliance programs where the depositor is a domestic MSB. Major issues addressed are:

• Identifying NBFIs
• MSB definition
• MSB legal requirements
• Identifying MSBs
• Establishing due diligence requirements at the customer level
• Developing monitoring programs

Instructor:
Ken Golliher is a principal with Pegasus Educational Services, LLC, a training firm headquartered in Louisville, Kentucky. He is an experienced banker with a unique ability to reduce complex legal concepts to plain English. He has explained the "why" and "how" of regulations to thousands of financial institution personnel and examiners. Ken's banking career began in 1972 and includes serving as a teller, commercial operations manager and as trust department legal counsel in a state and a national bank. For ten years he headed the education division of a regional consulting firm for financial institutions. He has served on the faculty of the LSU Graduate School of Banking, the OTS' Level I Compliance School and the FDIC's Advanced Consumer Protection School for examiners. He has presented seminars in more than 25 states and has served as an instructor at compliance schools sponsored by the Illinois, Indiana, Georgia, Kansas, Kentucky, Nebraska, Pennsylvania and Texas bankers associations. He is one of the moderators for the Bank Secrecy Act forum at http://www.bankersonline.com/

Who should attend:
The expected audience is bank compliance officers, Bank Secrecy Act officers and auditors. It might also be helpful to bank management and marketing personnel who are attempting to balance their desire to maintain customer relationships with the related costs and complexity of the effort. The program is not designed for MSB personnel. The program does not address bank/MSB relationships other than deposit accounts.

Tellers, New Accounts, Compliance Officers, Bookkeeping, Branch Managers, Compliance Officers, BSA Officers and all personnel who might be affected by, or need help coping with, a disaster will also benefit.

• Complete presentation (including slides and audio)
• Written Materials
• Follow-up Q & A

You have the right under this license agreement for this CD-ROM to use this presentation on a single-workstation. Use on a network is in violation of the copyright agreements. CD may be used by multiple users at a given institution but may not be placed on a network or in any other multi-user environment.