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#2261093 - 10/14/21 02:41 PM Directors - BSA Procedures
Jennifer Offline
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Jennifer
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Speaker @ recent BSA webinar said the BSA procedures must be approved by the Board of Directors. This is a new one for me - I thought only policy is required?

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#2261096 - 10/14/21 03:22 PM Re: Directors - BSA Procedures Jennifer
DeeQ Offline
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My former OCC examiners wanted the entire BSA program blessed by the BOD. Not a fan of that concept...
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#2261099 - 10/14/21 03:37 PM Re: Directors - BSA Procedures Jennifer
ACBbank Offline
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New York City
Generally speaking your Policy is approved by the Board and your procedures are supposed to execute the policies requirements and are implemented by management. If for whatever business reason you need to revise a procedure are you planning to run to the Board to update the procedure?

That said I have seen during enforcement actions where the regulators have required procedures to be approved by the Board. At very large institutions procedures may be approved by an Executive Committee, but they have something called Standards, which is a work around.
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#2261101 - 10/14/21 03:39 PM Re: Directors - BSA Procedures Jennifer
P*Q Offline

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FRB did BSA exam for us last October, this did not come up.

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#2261103 - 10/14/21 03:50 PM Re: Directors - BSA Procedures Jennifer
RockChucker, CAMS Offline
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The Country
I've never heard or read where the BOD is required to approve BSA procedures but they do need to regularly approve the BSA policy. We intentionally separated the two in our bank so they BOD doesn't need to get into the weeds about who does what with which program to do a particular task. It is entirely possible that the speaker unintentionally said procedure when what they meant to say was policy, I've seen it done before and have also done it myself.
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#2261125 - 10/15/21 12:29 PM Re: Directors - BSA Procedures Jennifer
edAudit Offline
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edAudit
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You are here
Are we talking about policy or procedures (and is there a MRA, MRIA or other that says to Do not answer that here)

https://bsaaml.ffiec.gov/manual/ProgramStructures/01

Boards of directors. 169 The board of directors is responsible for approving the BSA/AML compliance program and for overseeing the structure and management of the bank’s BSA/AML compliance function. The board is responsible for setting an appropriate culture of BSA/AML compliance, establishing clear policies regarding the management of key BSA/AML risks, and ensuring that these policies are adhered to in practice.
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#2261133 - 10/15/21 02:28 PM Re: Directors - BSA Procedures Jennifer
Adam Witmer Offline
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To me, I think the confusion of whether procedures need to be approved by the Board comes from the first sentence in the "Assessing the BSA/AML Compliance Program" in the BSA/AML exam manual, which says this:

"Banks must establish and maintain procedures reasonably designed to assure and monitor compliance with BSA regulatory requirements (BSA/AML compliance program)."

When I read this, I can see how someone (speaker or examiner) could view that sentence as implying that procedures are part of the BSA/AML compliance program.

That said, I typically view the BSA/AML program as the bank's policy (and possibly risk assessment and/or other addendums) and, therefore, I've typically only seen the BSA/AML policy approved by the board, at least at smaller financial institutions. Plus, I am NOT a fan of having the Board approve procedures which may need modified more frequently than a policy which outlines general responsibilities and requirements of the program (and arguably, a bank's policy could be considered procedures - at least general procedures - in and of itself).

At the end of the day, it probably comes down to what your examiner wants, but approving every single BSA-related procedure could be challenging, and seems like a waste of your Board's time.
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All statements are my opinion, not those of my employer, and should not be taken as legal advice.
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#2261135 - 10/15/21 02:44 PM Re: Directors - BSA Procedures Jennifer
rlcarey Online
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Galveston, TX
Adam - I agree

Unless you want to go to the board when you decide that SAR investigations will be filed in the third filing cabinet from the left rather than the second one before you make the change - I would highly discourage having the board approve procedures. Can you make them available for review - sure. The Board should focus on policy and management should focus on implementing procedures to carry out the board approved policy.
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