What should a bank's Bank Secrecy Act compliance program include?
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A. B. C. D.C
The Bank Secrecy Act (BSA) requires financial institutions, including banks, to establish and maintain effective compliance programs to prevent money laundering and terrorist financing. The program should include policies, procedures, and internal controls designed to detect, prevent, and report suspicious activity.
Designation of individuals responsible for day-to-day compliance is an essential component of a BSA compliance program. This includes the appointment of a BSA Officer who is responsible for overseeing the bank's compliance with the BSA and other anti-money laundering (AML) laws and regulations. The BSA Officer should have sufficient authority and resources to ensure that the program is effective.
In addition to the BSA Officer, a bank's compliance program should include a trained staff responsible for identifying suspicious activity, monitoring transactions, and filing timely and accurate reports of suspicious activity with the Financial Crimes Enforcement Network (FinCEN).
A bank's BSA compliance program should also include a risk assessment that identifies and evaluates the risks associated with the bank's products, services, customers, and geographic locations. The risk assessment should be reviewed and updated periodically to reflect changes in the bank's risk profile.
The program should have written policies and procedures that cover all aspects of BSA compliance, including customer identification and verification, customer due diligence, enhanced due diligence for higher-risk customers, and ongoing monitoring of customer activity.
Record retention is an important aspect of BSA compliance. Banks are required to retain certain records related to BSA compliance, such as Currency Transaction Reports (CTRs) and Suspicious Activity Reports (SARs), for five years. The program should have procedures for maintaining and safeguarding these records.
Finally, a bank's BSA compliance program should include training for all relevant personnel. The training should cover the requirements of the BSA and other AML laws and regulations, the bank's policies and procedures, and the identification and reporting of suspicious activity.
To summarize, a bank's BSA compliance program should include designation of individuals responsible for day-to-day compliance, a trained staff, a risk assessment, written policies and procedures, record retention procedures, and training for relevant personnel. It should be tailored to the bank's size, complexity, and risk profile and should be reviewed and updated periodically to ensure its effectiveness.
Regarding the answer choices provided, A and D are not relevant components of a BSA compliance program, while B is only one aspect of record retention that should be included in the program. Therefore, the correct answer is C, designation of individuals responsible for day-to-day compliance.