We were criticized a couple years ago for not designating a specific "backup BSA Officer" in our policy (which I didn't agree with), so I added a little section covering it and it worked fine. The backup was the Deposit Operations Officer, so I only listed the title, not the person's name. However, the Deposit Operations Officer is no longer going to be my backup and we've designated a new person who is just beginning in BSA. Her title will likely be changing soon to be more in line with her new role, so I don't really know what to put in the policy. Below is what I had in the policy before. Any suggestions on how to edit or tweak the sentence about the Deposit Operations Officer?


"The BSA Officer is responsible for ensuring that a Bank employee is capable and trained in order to provide back-up assistance in the event of his or her absence or as directed for pertinent tasks. The employee who has been designated to provide back-up assistance is the Deposit Operations Officer. In the event of a vacancy in the BSA Officer position, the President and Chief Administrative & Risk Officer will appoint a qualified Bank employee as the acting BSA Officer at the time of the vacancy. The acting BSA Officer will be submitted to the Board of Directors at the next regularly scheduled Board meeting for approval. If necessary, management will engage the services of a third-party service provider in the interim, to assist with the Bank’s BSA compliance needs to ensure ongoing compliance.

In the event of a dispute between the BSA Officer, BSA/AML compliance staff, and/or business line management, the dispute may be escalated to the President and/or the CEO for evaluation and a resolution."

I would just replace deposit ops officer with "designated employee" or something similar.

I would push HR to determine her title and update the policy then. You could amend now, but youlll have to do it again once her title is established.

Why? Why would you name a specific position when the person in it has no BSA experience. This is what happens when you listen to the whims of a specific examiner. You already have "In the event of a vacancy in the BSA Officer position, the President and Chief Administrative & Risk Officer will appoint a qualified Bank employee as the acting BSA Officer at the time of the vacancy" which means they have the ability to appoint the next most qualified person regardless of the position title.

Succession planning is another issue - who is currently scheduled to replace whom it not something that gets reduced in a policy document - it ties the bank's hands.

I completely agree with Randy and would suggest following the recommendation by bcompliance of "designated employee." There is no point in naming a specific person, or even title/position, in the policy. Just keep it general.

For example, here is an option you might consider:

"The BSA Officer is responsible for ensuring that a Bank employee is capable and trained in order to provide back-up assistance in the event of his or her absence or as directed for pertinent tasks. The name of this employee will be communicated to Sr. Management in writing and can change upon the discretion of the BSA Officer and/or Sr. Management. In the event of a vacancy in the BSA Officer position, the President and Chief Administrative & Risk Officer will appoint a qualified Bank employee as the acting BSA Officer at the time of the vacancy. The acting BSA Officer will be submitted to the Board of Directors at the next regularly scheduled Board meeting for approval. If necessary, management will engage the services of a third-party service provider in the interim, to assist with the Bank’s BSA compliance needs to ensure ongoing compliance.

We do not list any specific person or title, we just state designated employee.

Most of our policy is the BSA Officer or designee....

For example, I may not always pull the 314a list but my designee will if I am not here. I do not conduct the annual reviews for the exemptions but I sign off on them.

Depending on the size of your shop some examiners have been pushing for a Deputy BSA Officer. If your BSA Officer resigned who would do the work? An unqualified individual is simply going to fail. The BSA Officer role can be complex and it generally isn't easy to replace this position should it turnover.

Fair enough.

What do other banks do for a designated BSA Back up? Do you have one person or multiple people? We are looking at different options. We are fairly small but would like to be prepared in the event something would happen to our current BSA officer.

We consider ourselves small too and have one CSR level individual who is trained to review CTRs and an operations person who can submit to FinCEN but no-one that could just step into the BSA Officer role if something happened to me. That said, our risk profile is pretty minimal and it wouldn't take very long to get someone up and running or hire someone that has the skills.

Thank you for that input. Do you use any fraud alert systems? We use FISERV FCRM, if so do you have 1 person that works the alerts or multiple people?

Right now I am the only person that works the alerts in the fraud system but we did have one of our IT guys attend the software training so in an emergency they could step in a keep things running. Being able to access thing remotely has also made things easier. With Covid I was able to work from home while sick and didn't miss a beat.

If you are willing to share, do you utilize both the AML and Fraud side? Also roughly how many alerts do you receive weekly? Our numbers seem high at about 60-75/week.

does anyone who has a designated backup to the BSA officer assign any type of title? like BSA Advisor / Coordinator / Facilitator / Manager.

We use a different software system and have roughly 70 alerts a month but that has taken some serious work to achieve. Getting the rules to give you useful information takes time and effort.

Oh wow. Maybe we should look into our thresholds closer. If you don't mind me asking what is your bank size? We are about $425M

If RC or others share directly or in a PM, I know asset size is the typical benchmark used but my old bank had traditionally many more accounts with lower balances so the asset test was one part, and number of deposit accounts was critical as examiners always told us based on that latter number they thought our assets would have been double what they were. Again, low balance accounts.

Regardless, fine tuning system filters is always a good exercise.

We use Verafin, $1.5B in assets. Fraud alerts we get daily and average around 15-20 per day. BSA/AML alerts we get every other Friday and we average 125 every other week, and this is with us setting custom behaviors on many customers and reviewing our system settings regularly to ensure they still make sense. If any of this gives you any indication.

Andy brings up a good point as usual. We are just crossing 1B but we are primarily a commercial bank and have majority of customers that are small to large businesses. We offer consumer products but don't make an effort to bring in more consumers, just those that come to us.

Little late to the party, haven't been able to hop on in a while. My back up is our Compliance officer. Our policy reads "The BSA Officer will designate an Assistant BSA Officer. This Assistant BSA Officer will be a back-up person to the BSA Officer and will assist the BSA Officer with various duties. Throughout this policy the assumption is to be made that when the BSA Officer is mentioned, the Assistant BSA Officer will perform these duties in the BSA Officer’s absence. Although the BSA Officer may delegate BSA/AML duties to other employees, the BSA Officer is responsible for overall BSA/AML compliance."

We have a deputy BSA Officer. That person manages day-to-day BSA compliance.

In my experience, at some point along the asset size/AML risk journey, examiners begin extending the requirement that there is an appointed BSA Officer to include a succession plan to ensure compliance if the BSA Officer doesn't show up one day. In our last exam, we had fairly long conversations about our "bench," including who among staff would be ready to step into the deputy's shoes if they took on the BSA Officer role. For smaller, low risk institutions, this would be less important.

Reviving an older thread....having an issue with designating a back up BSA officer. I have been BSA and Compliance Officer for several years now...my back up is supposed to be someone in Deposit Operations who has expressed that she no longer wishes to be back up and frankly in the past years has done nothing as my back up. What are other institutions doing in this instance?
I don't think it's acceptable to notate a branch manager or branch employee as back up as there is no segregation of duties and the information they would be privy to does not sit well with me.
We are a small institution, $240 Million in assets with a relatively low risk profile, however we do have SARs, CTRs, Alerts and other issues that come up. I'd like to take an extended (2 weeks) vacation this year as the past years I have been unable to take much of anything nor use my vacation time.
Any thoughts or advice is greatly appreciated!

"she no longer wishes to be back up and frankly in the past years has done nothing as my back up."

Then you have a management issue that needs to be brought up to the board of directors. Not having a succession plan for your BSA Officer might be cited as a weakness in one of the four pillars resulting in an enforcement action. Also since when do employees get to pick and choose what they "want" to do? .

lol rlcarey you make an excellent point....there are aspects of my job I don't "want" to do but I do!

On paper she is noted as my "backup" however I can not seem to get time to get her to do anything as that back up....and honestly if someone doesn't want to be my back up or put in the effort to learn it, do I really want to leave them in charge when I'm out? I can only imagine a host of issues I would come back. That is why for the past several years I have taken Thursday Friday and Tuesday off on Monday holiday weekends to get past the 5 days in a row PTO time.

You need to be talking to Senior Management or the Board of Directors, as like I said, if you have an unqualified backup, all the regulators would have to do is ask a few questions, they could find themselves with a BSA enforcement action on their hands. If this person is not the right person, then they need to assign someone else for training.

Or just go on vacation for two weeks and let them figure it out on their own