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BSA Enforcement

Enforcement actions this season aren't limited to flood hazard. The Federal Reserve Board, acting through the Federal Reserve Bank of San Francisco, impose penalties on the Bank of Ephraim in Ephraim, Utah, for violations of the provisions in Regulation H implementing Bank Secrecy requirements. The FRB also cited the bank for violations of Treasury's BSA regulations.

These violations were cited in the bank's examination report dated December 31, 2000. The enforcement agreement requires the bank to develop a program for the "identification and timely, accurate, and complete reporting of known or suspected criminal activity." The order also requires the bank to establish a due diligence program, the elements of which are strikingly like the missing-in-action proposal on Know Your Customer.

The order also requires the bank to conduct independent testing for compliance, maintain internal controls to ensure compliance, ensure that the compliance program is supervised by a "qualified senior officer who possesses the appropriate experience, training, and authority to oversee" the program, and conduct training for all appropriate personnel, including lending officers and private banking officers.

Copyright © 2001 Compliance Action. Originally appeared in Compliance Action, Vol. 6, No. 13, 11/01

First published on 11/01/2001

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