I sat in the webinar that BOL had today on Reg GG. In our materials, it was discussed how it may be wise to make fairly loosely the connection with your AML program because of the high importance of BSA and because Reg GG hasn't been firmly established. Who at your bank, or what department should I say, is responsible for drafting your Reg GG policy? Is your BSA Officer completing the policy and procedures or someone else?

Only a couple observations...I'm interested in seeing how banks do this as well.

First, separating UIGEA and BSA/AML compliance to the extent possible is a very sound idea. A bank's choice of to whom responsibilities should be allocated will depend in part on its choice of a compliance mechanism.

If it chooses to incorporate a due diligence process instead of requiring all commercial customers to sign a certification, then the due diligence and enhanced due questions fit easily into its AML program and they would not have to be removed if UIEGA goes away.

Due diligence could equate to: Is your organization in any way involved in gambling activities? A "yes" response means you go to enhanced due diligence; i.e. you determine what those gambling activities are. (They could be as innocuous as lottery ticket sales.)

Enhanced due diligence queries could continue with: Are any of your gambling activities conducted via the Internet? A "yes" answer would trigger further interrogatories designed to assure that the involvement was legal and would incorporate obtaining the documentation required by UIGEA.

The key to keeping this as an emulsion rather than a mixture (studied science with my 5th grader last night) is not to incorporate anything into your BSA/AML program that you would have to take out if UIGEA was delayed or neutered; e.g. do not make obtaining the certification part of your BSA policies and procedures.

Bump. In your bank, is Regulation GG the BSA Officer's responsibility?

I happen to be BSA/Compliance Officer and yes, this is my responsibility. And by the way Ken, I'll see you at November's Mass Bankers BSA seminar. Shall I introduce myself as PizzaQueen??

Only as it relates to due diligence on commercial customers, we're adding that to the information gathered at account opening. Central Operations is actually creating policy/procedures.

Our BSA/Compliance areas report to one manager and we took ownership to see that it is implemented throughout the various areas. We are creating a standalone policy and will incorporate the various requirments within the other areas in the bank. We normally create a committee and have all departments that it touches included and assign them the areas they need to implement.
This has worked well for us with the Identity Theft Red Flag and several other areas as well.

Pizza Queen,
That would be great...I've had lots of similar introductions over the last few years and oftentimes know exactly who I'm talking to as a result.

Now that the June 1st deadline is here, how are you guys handling the responsibility for Regulation GG - still as small part of BSA/AML, or more towards the operational end? Would love to hear some feedback.

Mostly operational. We updated our new account forms and risk profiles to include questions relating to online gambling, and have a certification for those business that have gambling services to affirm they do not offer online gambling, do not engage in illegal internet gambling, and will affirmatively let us know if they begin conducting internet gambling operations.

On the back end, additional due diligence was conducted on our current casino customers to ensure they have no internet products, and we're in the process of having them sign the certification listed above. We don't have many, so it's not prohibitive to do so.

FBH, would you mind sharing your certification that you created for commercial accounts that state they do not engage in internet gamblng. That would be greatly appreciated.