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#1379771 - 04/22/10 08:12 PM Non-Bank Financial Institution/Monitoring
mlkl8 Offline
Junior Member
Joined: Sep 2007
Posts: 47
We are going to be banking a large company that offers consumer financial services: auto loans, small personal loans (secured and unsecured.) They are in IL,IN and FL. As a NBFI, we know they are required to have their own AML program, but do we as a bank have to see proof of their program? We are very hesitant to bank this customer, but it is going to happen whether we (in Risk) like it or not. We feel like we should be doing some kind of monitoring, above and beyond our usual procedures, but it doesn't seem like we are required to. Any thoughts?

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#1423755 - 08/03/10 10:39 PM Re: Non-Bank Financial Institution/Monitoring mlkl8
kw004h Offline
100 Club
Joined: Nov 2009
Posts: 219
Chicagoland, IL
bump

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#1423776 - 08/03/10 11:48 PM Re: Non-Bank Financial Institution/Monitoring kw004h
MagicCity Offline

Power Poster
MagicCity
Joined: Apr 2003
Posts: 3,003
Fort Lauderdale, Florida
I don't think you have to see proof of their program, but I would make sure that I have a full understanding of all their services, and get their expected cash and wire activity so you know what you will be dealing with.
If they are a well known company you should have a certain comfort level, and you could keep it at a high risk for the first 90 days until you get a comfort level that the activity is what you expected.
See if you can get samples of their brochures and have that in your Due Diligence file, and maybe print out information from their website as well.
All that combined with your reports of the activity should allow you after the 90 days to make them a medium risk.
I would never code an NBFI lower than medium.
Hope that helps you get started...

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#1424128 - 08/04/10 04:30 PM Re: Non-Bank Financial Institution/Monitoring MagicCity
kw004h Offline
100 Club
Joined: Nov 2009
Posts: 219
Chicagoland, IL
Thanks, MagicCity,

Though kal8 asked the original question, we have had a similar situation here. The FFIEC manual has specific guidelines for MSBs, but not so much for NBFIs that are not acting as MSBs. I appreciate your opinion!

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