In the FFIEC BSA/AML expanded exam procedures, it ask for a list of all laons that have defaulted that are secured by cash collateral, marketable securities or cash surrender value of life insurance. Does anyone test for this and if so, how? How do you identify high risk lending relationships and whos responsibility is it?

We monitor cash secured loans for payoffs before maturity - persons who purchase CDs, obtain cash secured loans, and payoff before maturity.

Well, in order to determine whether or not you decide to fund a loan, I am assuming you or the loan officer performs some kind of due diligence. For example, reviewing a credit report, visiting the site, etc. In reviewing all of the applicable documentation you can assign a rating to loan. In regards to who's responsibility it is, that depends on your organization's structure. Do you have a lending compliance officer or a BSA officer? I would ask management that very same question because what I can you is that someone should be able to answer your questions before a examiner asks them.