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#1121989 - 02/03/09 07:36 PM Examiners here - HIDTA question
travelgirl Offline
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Joined: Mar 2004
Posts: 223
Minnesota
This FDIC is here doing a BSA exam. There is an item relating to our BSA Risk Assessment in which they are commenting on. We are a community bank in the Minneapolis Metro area. According to the gov't website we are not located anywhere near a HIDTA area (accoring to the map and the listing of cities and states). Our RA states that HIDTA is a low risk for us as we are not located near a HIDTA and neither is our customer base.

The examiner is suggesting "the bank may want to revisit the High Intensity Drug Trafficking and Money Laundering deisgnations to ensure the State of Minnesota participates in this program and information presented is accurate."

I found a copy put out by the Office of National Drug Control Policy (ONDCP) for the State of MN showing all of the drug statistics as of April 2008. I don't think it's a question of whether or not MN participates in the program. We probably would be designated a high area if our statistics showed a greater problem with drug trafficking.

The examiner wants to know if MN participates in the program. I can't find anything to say specifically whether MN does or does not, but don't you think if the ONDCP did a study and found we were a high trafficking area, they would have made us a HIDTA.

Aren't all states looked at (or suggestions are given from local law enforcement) for drug trafficking problems?

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#1121997 - 02/03/09 07:47 PM Re: Examiners here - HIDTA question travelgirl
ktac MITCH Offline
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ktac MITCH
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Giant side of TX
I agree with you - The HIDTA determination is part of the Office of National Drug Control Policy. It is a national program ran out of the Whitehouse.
Sound like your examiner is the one who is mis-informed, or under educated and wants you to do the homework so he can be educated.
Notice that the URL for HIDTA information is http://www.whitehousedrugpolicy.gov/HIDTA/ AND
http://www.whitehousedrugpolicy.gov - - - gets you the Office of National Drug Control Policy
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#1122037 - 02/03/09 08:05 PM Re: Examiners here - HIDTA question ktac MITCH
Maytagman Offline
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Posts: 285
South
I second ktacMITCH: States don't get to decide whether they want that designation. I'd like to ask the examiner whether they think it was the HIDTA area state governors or state boards of tourism that asked to be on a national list showing areas of high-intensity drug trafficking (and by implication, drug-related murders and crime). Remember: Just because you don't have an answer for an examiner's question, that doesn't mean the examiner has a legitimate reason to be asking it in the first place.
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#1122047 - 02/03/09 08:10 PM Re: Examiners here - HIDTA question Maytagman
travelgirl Offline
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Joined: Mar 2004
Posts: 223
Minnesota
Thanks for the quick replies!!!! I will simply state that MN doesn't choose to participate, but rather it's the ONDCP at the national level that determines the participation. I have also printed off new maps (we have them from the last RA completion too) for the closest regions to show that MN is not included in the list. Yes our state borders ND, SD, WI and IA - which have some counties on the list - but none are near any of our branches, market or customer base.

I guess I should take this as a good sign that they are really digging for something to comment on, huh?

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#1122152 - 02/03/09 09:15 PM Re: Examiners here - HIDTA question travelgirl
Maytagman Offline
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Maytagman
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South
Maybe. It could also be an indication of the relative level of expertise of your examiner. Stay in close contact with them and handle with extreme care if they start talking about any perceived violations or exceptions - it might be based on a false belief such as the one you mentioned.
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#1122270 - 02/03/09 10:40 PM Re: Examiners here - HIDTA question Maytagman
travelgirl Offline
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Joined: Mar 2004
Posts: 223
Minnesota
The examiner is checking with someone else within the agency on this as she is thinking MN is opting out of participating in being designated a HIDTA...MN may be reluctant to go to the federal level for $$$ for too many things if lawmakers think drug trafficking is too far down on the "list" Not sure...we will see what she finds out.

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#1122281 - 02/03/09 10:51 PM Re: Examiners here - HIDTA question travelgirl
travelgirl Offline
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Joined: Mar 2004
Posts: 223
Minnesota
OK - word on the street from the FDIC field office is that currently MN doesn't participate in the federal program to ask for federal dollars to fight drug trafficking, therefore they won't be "designated" a HIDTA. However, it's being recommended we do our own "assessment" of each branch location to see if they are near any interstates, known drug areas, etc.

Just when I thought we were on top of things..learn something new every day.

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#1122289 - 02/03/09 10:57 PM Re: Examiners here - HIDTA question travelgirl
Maytagman Offline
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Maytagman
Joined: Jun 2008
Posts: 285
South
Let's get back to your examiner's original thought line:
A. The White House designates areas as HIDTAs.
B. MN is not one of them, as anyone can verify easily.
C. Regardless, you should treat MN as a HIDTA (a non-HIDTA HIDTA, if you will) because maybe a state government decided it wasn't going to play by the HIDTA rules.

Use extreme caution with this examiner's criticisms of anything and everything. I love that examiner's logic. (Maybe I should treat all my U.S. Citizen customers as nonresident aliens?) Apparently, according to them, if something is not high-risk, maybe you should pretend that it is high-risk, because, after all, you have to have something be high-risk.
Last edited by Maytagman; 02/03/09 11:02 PM.
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#1122296 - 02/03/09 11:01 PM Re: Examiners here - HIDTA question Maytagman
Maytagman Offline
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Maytagman
Joined: Jun 2008
Posts: 285
South
I would consider keeping it rated exactly as-is. They don't get to decide the risk-rating; your institution does. I would just change "Low risk - non-HIDTA" to "Low risk - Despite the fact that nearly every branch is located somewhat near an interstate (as is the case with the vast majority of bank branches nationwide), MN is not currently designated by the White House as a "HIDTA" nor is it near any nationally-recognized "known drug areas" or "high-intensity drug-trafficking areas." The number of cases of law enforcement interaction with the bank regarding drug-related matters in the past 5 years: Zero."
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#1122380 - 02/04/09 12:55 PM Re: Examiners here - HIDTA question Maytagman
Elwood P. Dowd Offline
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Joined: Aug 2001
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Next to Harvey
Quote:
...it's being recommended we do our own "assessment" of each branch location to see if they are near any interstates, known drug areas, etc.


Recommendations are wonderful things...whenever they are just plain stupid you can acknowledge then ignore them. Consider telling your examiner that your bank will, instead, adhere to published guidance from the FFIEC.
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#1122560 - 02/04/09 03:33 PM Re: Examiners here - HIDTA question Elwood P. Dowd
travelgirl Offline
100 Club
Joined: Mar 2004
Posts: 223
Minnesota
Thanks everyone for their feedback. After sleeping on it, I will probably make some minor changes in my RA to acknowledge that MN does not participate in the HIDTA program, but that we are still low-risk based on our locations and as a previous poster stated, we have had zero run-ins with law enforcement involving drug-related offenses.

I am also confident with the other pieces of our BSA program - money-laundering, high risk customers (cash intentive, etc.), staff training - that we could spot a problem in this area if one should arise. We only have four branches and know most of our customers activity very well.

Oh and now she's commenting that our procedures state we will check the OFAC list within a reasonable amount of time after an account is opened and apparently doesn't agree that our timeframe is reasonable. Again, I believe we have properly assessed our risk in this area, put in good procedures (for both loan and deposit account openings) and are comfortable with the time frames in place. Couple that with the fact that we have not had any true matches (now that I say that we probably will).

Sounds like it's going to be another day in paradise.

Thanks again for everyone's feedback.

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#1124064 - 02/05/09 08:14 PM Re: Examiners here - HIDTA question travelgirl
WonderWoman Offline
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WonderWoman
Joined: Mar 2007
Posts: 2,108
gone fishin'
Being from MN - I'm amazed they do not participate in the program ... there is a VERY LARGE methamphetamine problem in MN.

I'm now in Northern California & we believed our county to be a HIDTA - however it was not designated as such. We classified it as a HIDTA anyway & sure enough, the next year we were added to the list!
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