Would anyone be willing to share how intense their review of high risk (particularly MSBs) customers might be without going into great detail? In other words, do you look at all transactions of that customer on a daily, monthly, quarterly basis or at particular types of transactions? We're a very small bank in a rural area and have fewer than five customers identified that we're monitoring, but our process seems so very labor intensive.

Any suggestions with what you're doing - both large and small banks - would be helpful.

Thanks

Every business has an expected pattern of deposits and checks drawn. Whether you lok on a monthy or quarterly basis depends on how high the level of risk is perceived. As for monitoring on a daily basis, I would look at your system reports for unusual activity for all accounts. If you see an issue or the account hits more than one of your reports, you need to follow the activity. Being a small bank in a rural area, you have the opportunity to know your customers better than a large regional bank. Rely on your loan officers to provide you with a profile of the type of activity to be expected. MSBs are problematic, however, you will see that the activity should be consistent - if you see a deviation from that activity pattern, you need to determine why it occured.

We have a few more than five, but still a small number of MSB accounts. We ended up creating an MSB risk assessment that took into account the guidance relased by FinCEN dated 4/26/2005 for what types of activity consitute higher and lower risk MSBs. We then identified key elements in that guidance and compared them to our existing customer account activity patterns and rated them as low risk MSB, moderate risk MSB, and high risk MSB. We then assigned monitoring schedules according to their risk.

Our highest risk MSBs are on a weekly monitoring schedule and each transaction is reviewed from the week before with detailed documentation of what transpired in the account and a comparative of how much money was paid out in money services by the business compared to how much money was withdrawn from the account to cover those expenses, how many checks over $3000 and how many over $10,000 were cashed by the business, and we even document the names of persons with large checks cashed to track patterns. But keep in mind here, these are our HIGHEST risk MSBs.

Our lowest risk are monitored much less rigorously and that basically consists of pulling a week of transactions on a regular schedule to determine if their activity is still consistent with our original assessment.

I hope that is helpful to you, it was a bit of work to set up, but now we are able to streamline our monitoring to be less time consuming on the businesses that do not warrant it.

We have 4 "identified" high risk accounts and no MSB's. We were told by OCC to monitor them quaterly. We look at all accounts (deposit and loan) to get the full picture of the customer's activity. I have a form to share if you PM me your address. It passed the recent OCC BSA test for MY bank....may nto be ok for yours but you are free to tweak it to your needs.