Question - why do examiners & auditors keep recommending banks scan against the 311 list when the bank doesn't have payable through & correspondent banking?

None of the 311 special measures require scanning transactions (1st Measure) – They only prohibit opening or maintaining correspondent or payable through accounts (the 5th measure).

Couldn't you just sign up for 311 updates, review the new measure & if it doesn't include the 1st one, go about your merry way?

Thoughts?

In five years as a BSA Officer I've never had an examiner or an auditor so much as mention the subject.

I've been doing it for 15 & it seems lately it's become their next "hot topic". I was able to document that none of the measures apply to my bank & they were fine with it - but I have a lot of colleagues getting "dinged" because they're not scrubbing the list ??

The "list' is on a few parties long. We had it added a while back as it was easier than debating this point time and time again.

I happen to agree. When I perform an audit, I verify that you have policies and procedures in place to determine if a special measure is applicable and be made aware when they are issued. So I might ask how you determined that the FBME 5th special measure doesn't apply. As you answered no payable through and foreign correspondent accounts my transaction testing is done. With the heightened focus on customer due diligence and beneficial ownership, examiners may want to start asking you to search for an FBME as it is a potential red flag if any of your customers are sending or receiving transactions for there. This would be a best practice discussion I would have offline with a a BSA Officer, not a formal audit finding in the report.

Same here.

It was first brought to our attention about 5 years ago, a newbie examiner. We have it included in policy and procedures now (their recommendation) and require the list to be checked against. In looking at the list, you already know we do not do business with any of them.

But why check against the list if it's not required based on the measures applicable to each 311?

Our regulators wanted it that way.

ditto

I even had a lecture on the "importance" of it.

*ugh* that makes no sense! Believe me, I understand what it's like to have tough exams & regulators - but this is why examiners keep pushing ridiculous rules on the rest of us. If we don't push back - we all take the heat.

Example - I pushed back on the OCC & we agreed I just had to put it in my policy that we will check the publications & document whether or not they apply to us. But there is no reason that I'm aware of (regulatory wise) that we have to scrub any transactions for the current ones on the list.

Most of the smaller banks would rather fight the real (imaginary) issues. A lecture and something in the work papers is not cost effective to fight.. We need the big guys (or large regionals) to fight theses things first.

That's just it. The bigger guys are fighting this. I was $10B. & A lot of my other colleagues that are larger, fight it.

I'm finding its my smaller bank colleagues that don't fight & put in these arbitrary procedures, making things more difficult for them.

I'm over $10B and we called up our service provider who manages our watch lists and had the parties added. If FinCEN revises the list, I get an email and confirm the service provider updated the list. All in, it took 2-3 hours of my time.

I tend to save my ammunition for the bigger issues.

Anytime a regulator wants me to do something that's outside the regulation, it is a big issue to me.

That would be a lot of big issues

It's a "gotcha" in the examination process; i.e. something of little or no practical importance where very few banks, particularly community banks, are even familiar with the statutory reference or the synonymous label, "special measures." Yet, it gives a lazy examiner something to write about...

Just put the mechanism in place and go on to what's next.