Answer by Richard Insley:Backgrounds in security or operations are good because you need someone who understands bank records and can analyze transaction patterns. In my opinion, a lender would be a bad choice. A seasoned teller wouldn't be a bad choice overall, provided that person is promotable to officer status. Seasoned tellers/head tellers are perfect candidates for CTR review/filing positions because they know your policies inside out, have seen every possible kind of transaction and can crush uncooperative tellers like a bug.
Answer by Jim Bedsole:The regulators expect the BSA Officer to be someone with authority to ensure BSA compliance. Take a look at the FFIEC BSA/AML Examination Manual in the section on BSA/AML Compliance Program -- Overview. Here are a few key quotes:
"While the title of the individual responsible for overall BSA/AML compliance is not important, his or her level of authority and responsibility within the bank is critical."
"The board of directors is responsible for ensuring that the BSA compliance officer has sufficient authority and resources..."
"The appointment of a BSA compliance officer is not sufficient to meet the regulatory requirement if that person does not have the expertise, authority, or time to satisfactorily complete the job."
"The line of communication should allow the BSA compliance officer to regularly apprise the board of directors and senior management of ongoing compliance with the BSA."
To me, this means the person designated needs to have explicit authority to enforce policy as well as to influence policy changes when necessary. It also needs to be someone that will not be intimidated in front of senior management or the board, and someone in whom senior management and the board have confidence, and from whom they are comfortable hearing. The understanding of bank records and policies and the ability to analyze transaction patterns are important. This position also needs to be one that can establish and maintain a program, develop and administer a budget, conduct effective risk assessments and monitoring and identify and address gaps and deficiencies in the program. This combination of skills and experience doesn't typically come with someone at a junior officer level. Also, no matter who you choose, if they haven't had past experience in serving as a BSA Officer I'd highly recommend that you send them for training. I know the Florida Bankers Association puts on an annual BSA/AML school and other organizations may also have schools and/or conferences.
First published on BankersOnline.com 9/22/08