We check new accounts against OFAC on a nightly basis. The next day our COO gets a report that shows the outcome of new accounts. I was reading the BSA Manual and in the OFAC section it states that banks who check against OFAC on a nightly basis are to provide limited services, such as deposits only, until the check is complete. Does this mean that we cant order check's and debit cards? These can be easily cancelled if we get a hit.

You are 100% correct, but logic to an examiner??? They only know what is written. That's their job. You can help yourself by pointing this out "in writing" in your risk assessment. This way, you are stating that you are aware of the risks, but are accepting it based on your ability to cancel everything. Just make sure your vendor relationships can cancel everything and the report does not sit on the COO's desk while he/she is on vacation.