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#1371397 - 04/08/10 06:08 PM Monitoring High Risk Accounts
Susielou Offline
Gold Star
Joined: Aug 2005
Posts: 351
Midwest
We are a small community bank but need to have procedures for ongoing monitoring of high-risk accounts once they are identified. I have addressed customer due diligence but regulators want more specific procedures on hisk risk monitoring. Does anyone have any information they would be willing to share?

I'd like to get this approved as quickly as I can. Thanks!

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#1371407 - 04/08/10 06:21 PM Re: Monitoring High Risk Accounts Susielou
ApacheBelle72 Offline
Platinum Poster
Joined: Sep 2006
Posts: 652
I'll be happy to share what I have. Just PM me with e-mail and I'll send you what I have.

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#1371485 - 04/08/10 07:51 PM Re: Monitoring High Risk Accounts ApacheBelle72
nemsi Offline
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Joined: Nov 2005
Posts: 383
If i can add to this topic.... Once you have your list do you keep folders on these customers? I have a list with name,risk rating, account #'s, entity owner's name, nature of business, EIN, date last review, and whether or not there was any unusual or suspicious activity noted in the review. During an audit was told that I need to have a folder for each customer and make copies of the information that i reviewed. Some of the convenience stores deposit 100 items at a time!! I review 30 days of activity- that includes credits (all items in a deposit) and debits (checks and electronic). By the way we are a small community bank, not located in or adjacent to high risk areas. I'm trying to determine if others are getting this type of request.

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#1371495 - 04/08/10 08:03 PM Re: Monitoring High Risk Accounts Susielou
dickr Offline
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dickr
Joined: Feb 2010
Posts: 356
Middlesex Cty NJ
I'm in a 5 branch, $120MM community bank, so automated software is out of the question! It depends on how you want to weight different categories when assigning risk (business type, specific levels of certain transaction activity, location,etc.), but I think the EDD process is as subjective as you want to make it. This bank had been using automatic triggers to classify as high-risk (6 CTRs annually, 5 wires, etc., and had way too many 'high risk' accounts until they were convinced that CTRs are a good thing and that every business that deals in cash isn't involved in money laundering.
We use the Exam Manual as a guide for review. We look at all the deposited items,and all ACH,debits/checks on the monthly statement for appropriateness for the business type, as well as comparing to anticipated activity when account was opened/reviewed. We also track all cash over $3000 per day for all accounts just for review; any MSBs that aren't classified as 'high risk' get extra monitoring at least quarterly.
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Lord,give me patience - and I want it NOW!!!

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#1371501 - 04/08/10 08:09 PM Re: Monitoring High Risk Accounts nemsi
dickr Offline
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dickr
Joined: Feb 2010
Posts: 356
Middlesex Cty NJ
I try to save the trees by reviewing activity on-line; I make a note in the file.The system keeps 18 months worth of statements available.
_________________________
Lord,give me patience - and I want it NOW!!!

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#1371542 - 04/08/10 08:32 PM Re: Monitoring High Risk Accounts nemsi
ApacheBelle72 Offline
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Joined: Sep 2006
Posts: 652
Originally Posted By: nemsi
If i can add to this topic.... Once you have your list do you keep folders on these customers? I have a list with name,risk rating, account #'s, entity owner's name, nature of business, EIN, date last review, and whether or not there was any unusual or suspicious activity noted in the review. During an audit was told that I need to have a folder for each customer and make copies of the information that i reviewed. Some of the convenience stores deposit 100 items at a time!! I review 30 days of activity- that includes credits (all items in a deposit) and debits (checks and electronic). By the way we are a small community bank, not located in or adjacent to high risk areas. I'm trying to determine if others are getting this type of request.
I keep a binder with each customer, but, I don't copy all the information. I have a form I fill out that monitors a months statement. I do look daily at the account to see if there is any "suspecious activity".

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#1371547 - 04/08/10 08:35 PM Re: Monitoring High Risk Accounts ApacheBelle72
ApacheBelle72 Offline
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Joined: Sep 2006
Posts: 652
I actually do what "dickr" does. We don't have the software, however, our core processing system keeps information and that is what I use. Our bank is the same size too.

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#1371609 - 04/08/10 09:49 PM Re: Monitoring High Risk Accounts ApacheBelle72
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 80,325
Galveston, TX
Any auditor that says you have to keep copies of everything you look at is either a little too anal retentive or forgot where they parked their dinosaur when they pulled into the parking lot this morning. Document what you looked at, time frames, etc. Most importantly document your findings and conclusions. If they want to test to see if they concur with your conclusions, then give them inquiry access to your information systems and tell them to have a go at it.
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#1371615 - 04/08/10 09:55 PM Re: Monitoring High Risk Accounts rlcarey
ApacheBelle72 Offline
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Joined: Sep 2006
Posts: 652
I definately agree with ricarey. In fact, the High Risk Customer form has exactly that and a place to make conclusions. I don't have enough room to print and file all that......ha

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#1372233 - 04/09/10 07:32 PM Re: Monitoring High Risk Accounts ApacheBelle72
Georgia Plum
Unregistered

Ditto. On-line, document in excel spreadsheet my reviews and conclusions.

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#1372536 - 04/12/10 02:15 PM Re: Monitoring High Risk Accounts
Compliance Buzz Offline
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Joined: Feb 2002
Posts: 319
NJ
We have examiners here now, and we are getting similar feedback on our high/medium risk files: create folder, build 'activity profile,' customer history (business location(s), customer base, etc.). Based on this core data, reviews need to be THOROUGHLY documented via written comments: what we looked at, any changes in trend profile, abnormalities and conculsion. Concept is that anyone can pick up the file and know exactly why they're high risk, what actiity to expect, and who's been looking at what.
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#1372736 - 04/12/10 06:22 PM Re: Monitoring High Risk Accounts Compliance Buzz
Susielou Offline
Gold Star
Joined: Aug 2005
Posts: 351
Midwest
ApacheBelle72, I think the High Risk Customer form is something I would like to take a look at. At least I feel we aren't the only institution that examiners are taking a closer look at this topic.

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#1372766 - 04/12/10 06:48 PM Re: Monitoring High Risk Accounts Susielou
ApacheBelle72 Offline
Platinum Poster
Joined: Sep 2006
Posts: 652
It may be the one I got from the Bankers Tools, I'll send to you now!

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#1372810 - 04/12/10 07:32 PM Re: Monitoring High Risk Accounts Susielou
dickr Offline
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dickr
Joined: Feb 2010
Posts: 356
Middlesex Cty NJ
If possible, I'd appreciate a copy of the High Risk Monitoring Form as well. Can't locate in on BOL site. Thanks.
_________________________
Lord,give me patience - and I want it NOW!!!

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#1372902 - 04/12/10 09:01 PM Re: Monitoring High Risk Accounts dickr
Dani York, CRCM Offline
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Dani York, CRCM
Joined: Apr 2005
Posts: 3,663
TN
The FDIC examiner from the supervisory panel at the Tennessee BSA School spoke about this directly as a best practice.
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I can't herd the cats anymore, so I just set up the electric fences and let them fry when they stray out of bounds.

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#1374355 - 04/15/10 12:10 AM Re: Monitoring High Risk Accounts Dani York, CRCM
WonderWoman Offline
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WonderWoman
Joined: Mar 2007
Posts: 2,108
gone fishin'
I keep a folder on all my High Risk customers - it's easier for me to organize. I do not print out everything - I have a form that tracks Cash, Wires, MI, Float, and ACH activity.

I have verbaige on my form that states:

"I certify that the above activity was reviewed regarding deposits, withdrawals, and all other activity, but due to paper volume, the activity/history was not printed except for any suspicious or unusual activity that was noted at the time, which is attached. If there are no specific activity/transactions attached, then there was no activity to report."
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#1374359 - 04/15/10 12:24 AM Re: Monitoring High Risk Accounts WonderWoman
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,292
Spreadsheets that show trends, etc. should be acceptable, or at least (if nothing suspicious) that you reviewed specific data ..xyand z from January February and March. You don't have to print out files that are easily retrievable. I don't even need paper, give me electronic files to review. Just give me something that shows these customers are being monitored.

I have audited banks where the high risk files showed nothing except "nothing suspicious"..no statement of what was reviewed, types of transactions, why it was normal for this customer, etc. Well......give me something.
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The HMDA Academy
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#1374505 - 04/15/10 02:29 PM Re: Monitoring High Risk Accounts ApacheBelle72
madukes Offline
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madukes
Joined: Jul 2009
Posts: 1,448
Flyers Country
Originally Posted By: ApacheBelle72
It may be the one I got from the Bankers Tools, I'll send to you now!


Could I get a copy too?

thanks!

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#1374619 - 04/15/10 03:36 PM Re: Monitoring High Risk Accounts madukes
ApacheBelle72 Offline
Platinum Poster
Joined: Sep 2006
Posts: 652
Madukes, please send me an email and I'll share what I use!

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#1374817 - 04/15/10 06:51 PM Re: Monitoring High Risk Accounts ApacheBelle72
abbyauditor Offline
Member
abbyauditor
Joined: Dec 2006
Posts: 78
texas
We had out examin about 7 months ago and I am here to tell you the OCC examiners really let me have it. I was documenting what I looked at, with spreadsheets and so on and they told me it was not acceptable. They wanted to see every little piece of paper that I looked at. So now I take all my hard copies and scan them along with a brief synopis of the finding into our image system. If they want to look at 2,500 pieces of paper, then by all means, go for it.

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#1374823 - 04/15/10 06:58 PM Re: Monitoring High Risk Accounts abbyauditor
ApacheBelle72 Offline
Platinum Poster
Joined: Sep 2006
Posts: 652
That is unreal - I've never had them ask for the hard copies. That's scary.

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#1374959 - 04/15/10 09:01 PM Re: Monitoring High Risk Accounts ApacheBelle72
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 80,325
Galveston, TX
I agree - very ridiculous. I might call the ombudsman and get an "official" clarification. One field examiner does not the rules make.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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