Thread Options
|
#350370 - 04/22/05 04:55 PM
Exam Inconsistencies
|
Junior Member
Joined: May 2003
Posts: 28
CA
|
Double standards? Rogue examiners? A monster with two heads? From ABA's newsletter today. As part of our ongoing effort to achieve consistency in the examination process, the ABA is compiling information from our members on how the banking agencies are implementing the changes to the Bank Secrecy Act/USA PATRIOT Act and other relevant laws during examinations. There has been a plethora of examples in the past year of dramatic exam inconsistencies and ABA has shared those problems with the Bank Secrecy Act Advisory Group Subcommittee on Examinations. We learned this week that a bank was told by a lead examiner that the agency "absolutely confirmed that his examining team has been instructed to take a zero-tolerance approach with their banks on BSA." From the Memo signed by all regualtory agency and Fincen (it's got real signatures - you can read it here. At the same time, we wish to stress that the approach of the FBAs or FinCEN is not one of "zero tolerance." To the contrary, we continue to expect examiners to use sound judgment in conducting supervisory assessments of compliance and in recommending corrective action. We note that, in keeping with longstanding practice, each FBA has processes in place for review of examiner findings and recommendations for enforcement actions to ensure consistent supervisory responses to identified problems.
|
Return to Top
|
|
|
|
#350371 - 04/23/05 02:25 PM
Re: Exam Inconsistencies
|
10K Club
Joined: Jul 2001
Posts: 83,226
Galveston, TX
|
If you are subject to such an event that goes against what you think is a fair and balanced approach by the field examiners - contact John Byrne at the ABA - they want to know so they can anonymously use the example when dealing with the agency's top brass.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com
|
Return to Top
|
|
|
|
#350372 - 04/23/05 05:04 PM
Re: Exam Inconsistencies
|
10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
|
... and consider taking a proactive stance on getting the exam report's language brought under control. As has been said many times before, banks often do themselves (and other bankers) a disservice by refusing to plea their cases within the appeals process established by each of the federal regulators. Of course, you must pick your battles, since it's never a good idea always to be at loggerheads with examiners. But when you are convinced that an exam report is in error and the stakes are significant enough to fight over, follow the process.
_________________________
John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
|
Return to Top
|
|
|
|
#350374 - 04/23/05 10:47 PM
Re: Exam Inconsistencies
|
Junior Member
Joined: May 2003
Posts: 28
CA
|
Quote:
We learned this week that a bank was told by a lead examiner that the agency "absolutely confirmed that his examining team has been instructed to take a zero-tolerance approach with their banks on BSA."
You can submit your latest BSA examination experience like the one above here.
WE NEED TO SUPPORT JOHN BYRNE!!
As an FYI, did you know there were about a dozen C&D's issued for Y2K violations. And guess what happened to those banks on January 1, 2000? Fortunately, Y2K had an ending - the standard for BSA examination keeps escalating and nobody seems to know how much is enough.
Bonnie, thank you for your concern but I'm an ex-banker. And I hope they can't subpeona BOL for user info, IP address, etc.
|
Return to Top
|
|
|
|
#350375 - 04/24/05 11:14 AM
Re: Exam Inconsistencies
|
10K Club
Joined: Aug 2001
Posts: 21,939
Next to Harvey
|
Some examiners do read BOL. So do some of the folks from FinCEN. The correct response to that is that any anecdotes advanced here should be accurate and be prefaced by an attempt to fully understand any citation to authority that an examiner has given as well as any perspective clearly labeled as opinion.
Nevertheless, there are anecdotes aplenty to demonstrate that the examination process is inconsistent and that examiners' personal opinions are being offered on the same plane as citations to authority. The dilemma is that many examiner statements do not appear in the written reports of examination, but are taken as the gospel by the bankers who heard them. In addition, when bankers do seek the help of the ABA they are reluctant to be named to the agencies. Thus, the agencies can shrug (as they did en masse) in the letter linked above and say, "There is no tangible evidence that this is happening."
Whether the fear of reprisals is legitimate, it exists. Currently, most banks just "cave" in the face of an errant criticism, fearful that any victory would be Pyrrhic. However, they are slowly beginning to realize that the potential for a second BSA criticism on the same point in a subsequent exam can bring disastrous consequences; they are beginning to comprehend that surrendering to an errant criticism is the foolish decision, not the judicious one.
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.
|
Return to Top
|
|
|
|
#350376 - 04/24/05 07:39 PM
Re: Exam Inconsistencies
|
Anonymous
Unregistered
|
Quote:
... and consider taking a proactive stance on getting the exam report's language brought under control. As has been said many times before, banks often do themselves (and other bankers) a disservice by refusing to plea their cases within the appeals process established by each of the federal regulators. Of course, you must pick your battles, since it's never a good idea always to be at loggerheads with examiners. But when you are convinced that an exam report is in error and the stakes are significant enough to fight over, follow the process.
This is good advice. The problem is that much of the examiners' BSA/AML/PATRIOT suggestions and criticisms can intentionally be kept under the radar by the examiners. They present a memorandum with bullet points before they leave, and if you agree to readily "correct" certain things, then they tell you they'll "leave it out of the report", as though they're doing you a favor. But when the report comes, your Compliance rating of "1" is still downgraded to a "2", and they're obviously using the "out of report" stuff as part of an overall effort to downgrade the Compliance rating to a "2"...or worse. The whole process has become abusive and arbitrary. There just are no BSA/AML examination standards whatsoever.
|
Return to Top
|
|
|
|
#350380 - 04/25/05 10:34 AM
Re: Exam Inconsistencies
|
100 Club
Joined: Jun 2004
Posts: 214
Connecticut
|
Which regulator does not want BSA reporting to compliance?
_________________________
Michele A. Johnson, Compliance Manager
Integrated Compliance Solutions, LLC
|
Return to Top
|
|
|
|
#350383 - 04/25/05 06:31 PM
Re: Exam Inconsistencies
|
10K Club
Joined: Nov 2002
Posts: 20,654
The Swamp
|
The FED and last I knew, FDIC, still looked at BSA, etc ONLY under the S&S exam. We just finished with both...BSA critisizm had no affect whatsoever on our Compliance rating.
_________________________
My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
|
Return to Top
|
|
|
|
|
|