Thread Options
#1834948 - 07/22/13 01:24 PM OFAC scan for check payees
Beachbum, CRCM Offline
Gold Star
Joined: Dec 2006
Posts: 480
Knee Deep in Regs
Management is asking that tellers run an OFAC check on all non-customers cashing on-us checks.
If we have a hit on a payee we would contact Treasury, but any thoughts on how the teller should handle the situtation at the time of the transaction?
_________________________
What we think, we become.
Buddha

Return to Top
BSA/AML/CIP/OFAC Forum
#1834952 - 07/22/13 01:31 PM Re: OFAC scan for check payees Beachbum, CRCM
NotDoneYet Offline
Gold Star
NotDoneYet
Joined: Jul 2010
Posts: 482
PA
We would reject the transaction and tell them why. Being on the OFAC list is not a secret.

Return to Top
#1834958 - 07/22/13 01:45 PM Re: OFAC scan for check payees Beachbum, CRCM
Beachbum, CRCM Offline
Gold Star
Joined: Dec 2006
Posts: 480
Knee Deep in Regs
would you release the check back to the payee?
_________________________
What we think, we become.
Buddha

Return to Top
#1834972 - 07/22/13 02:03 PM Re: OFAC scan for check payees Beachbum, CRCM
*W*W* Offline
Platinum Poster
Joined: Feb 2010
Posts: 835
Do you run OFAC on all the checks your bank pays? If you decide to check OFAC on all check cashing, how will you document the teller ran OFAC? Will you retain this documentation? For how long?

I would do a search in the threads for this topic and get some other opinions before agreeing to implement this.
_________________________
Live Like No One Else!
CRCM

Opinions expressed are my own and do not reflect the views of my employer.

Return to Top
#1835123 - 07/22/13 04:40 PM Re: OFAC scan for check payees Beachbum, CRCM
NotDoneYet Offline
Gold Star
NotDoneYet
Joined: Jul 2010
Posts: 482
PA
We have risk-assessed and decided to run OFAC on payees of checks, and not because of higher risk but because our front line seems to forget when they are suppose to run a search, so it should be easier to just do it by habit. The search is retained under the WatchDOG program we use, but because it is our bank's policy. I believe we retain the information from exam to exam since it isn't a required search by regulation. However, we could retreive longer periods if needed.
We would give the check back to payee.

Return to Top
#1835158 - 07/22/13 05:56 PM Re: OFAC scan for check payees Beachbum, CRCM
Beachbum, CRCM Offline
Gold Star
Joined: Dec 2006
Posts: 480
Knee Deep in Regs
our core processor produces a report for each ofac scan. we would keep this report with our ofac scrubs reports.
_________________________
What we think, we become.
Buddha

Return to Top
#1835353 - 07/23/13 12:14 AM Re: OFAC scan for check payees Beachbum, CRCM
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,310
Galveston, TX
Originally Posted By: beachbum
Management is asking that tellers run an OFAC check on all non-customers cashing on-us checks.


So, management thinks there is a risk that one of your customers is going to do business with someone on the OFAC list and that person is going to walk into the bank to cash the check??? You are kidding right? People walk into a branch to cash a check on probably about .001% of all checks that are written by your customers. I would think then, that there is a much greater risk that such a check would be presented though the in-clearing process. So, using that logic, I guess you better run the payees on every check presented through in-clearings through OFAC as that presents the greater risk.

I can understand the regulators trying to convince a bank to do this. Why management wants to shoot themselves in the foot in such a manner is a little beyond me. They are just setting the bank up for failure in an audit when the auditor cannot find the OFAC check on file. Unless there is a history of people on the OFAC list running rampant through your community, it is a big waste of resources. I can tell there was not much thought put into this portion of your written OFAC risk assessment on which your OFAC mitigation efforts should be based.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1835373 - 07/23/13 02:08 AM Re: OFAC scan for check payees Beachbum, CRCM
Dr.Ozya Offline
Member
Joined: Mar 2013
Posts: 84
Phila
The point that the examiners have is that SDNs don't have an access to the regular banking system through the account opening, so if they are paid/supported/financed by checks, they are likely to cash their checks as this seems to be the only unprotected gateway. I've looked at the SDN list - there are 62 US residents and entities there, and the number may be growing as the SDN lists are "enriched" by various mafias, etc. With about 7,000 banks in the nation, there is a 1% chance that an OFAC person will show up at your institution. And since they are possibly paid more than once in their lifetime (otherwise they wouldn't be important enough to get on SDN list), and they wouldn't want to show up at the same bank all the time, the chances are substantially higher, especially for bigger banks.

Just a little "devil's advocate" statistics exersize, but with the zero tolerance on OFAC violations, why take chances?
_________________________
CAMS CRCM

Return to Top
#1835374 - 07/23/13 02:15 AM Re: OFAC scan for check payees Beachbum, CRCM
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,310
Galveston, TX
These people are not stupid. They are not going to walk into a Federally regulated bank to cash a check. They are going to cash the check at the corner MSB. Plus, if you think you might have customers writing checks to people on the OFAC list, then I would suggest that you spend your energies on better due diligence rather than chasing your tail at the teller line.

there is a 1% chance that an OFAC person will show up at your institution

If all for statistics, but they don't work in that manner.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top

Moderator:  Andy_Z