VIDEO: Negative News and SARs
In this Compliance Clip (video), Adam talks about recent guidance relating to negative news and SAR filings. This video would be great to share with your BSA team.
Video Transcript
The following is a transcript of this video:
This Compliance Clip is going to talk about negative news and Suspicious Activity Reports. So this is a BSA topic.
Years ago, I saw a question that essentially said, “Look, we have an examiner who is telling us we need to file a Suspicious Activity Report because of negative news that was in our local media, whether it was newspaper or on television, but there was negative news about a customer.”
Over the years, there's not been a lot of guidance to this question where examiners have sometimes pushed for Suspicious Activity Reports in relation to negative news. In the past there wasn't guidance, but fortunately we've seen new guidance. This is actually something we covered in our BSA Annual Update for Spring of 2021. We also will covered this topic in our Spring 2021 Quarterly Compliance Updates. So this is something new that came out that I want to share with you today.
Negative news. Fortunately, a new guidance came out on January 19th, 2021, where the joint agencies, some of the regulators, addressed a number of SAR topics in these SAR Frequently Asked Questions. Two of the questions, at least, related to negative news. So I wanted to share these with you.
They are categorized. So what you see at the top is the category of question. But the question was this: Is a financial institution required to file a Suspicious Activity Report based solely on negative news? The answer, of course you see here, is no. What it really comes down to is this – negative news should be a red flag indicator for you to do some enhanced due diligence and dig into that customer's account to determine whether or not they have suspicious activity in your organization. Negative news, itself, does not require a Suspicious Activity Report but what it should do is it should trigger enhanced due diligence. Just like a judicial subpoena coming into your organization should trigger enhanced reviews of that customer relationship or accounts and their transactions, the same thing should apply to negative news. It should be a red flag indicator for you to conduct enhanced due diligence to make sure you don't have suspicious activity being conducted through your financial institution.
The next question was question five of those Frequently Asked Questions and it said: If there are multiple negative news alerts, based on the same event, is a financial institution expected to independently investigate each of those alerts? What you may have as a local news outlet releases a story, a week later, another local news outlet picks up on that story. A month later, you have a regional news outlet and two months later, a national news outlet. Well, each time that negative news comes out, you don't have to conduct a new investigation if it's all related to the same negative news. You don't have to repeat that for news pieces. What you're looking at is the actual potential concern that's in that negative news and you would research it. Of course, negative news could be a big deal. I remember years ago when I was a BSA Officer in a regional community bank, I saw on the local news that there was the largest drug bust in the area. I saw this at night and I saw cameras of pallet after pallet, after pallet of drugs and safe after, safe after safe of weapons and cash. I thought to myself, oh my goodness, I hope this is not a customer. So the first thing I did the next morning is I typed in that customer's name, queried in any and every way I could to see if that was a customer at our financial institution. Fortunately, it was not so I have locked out at that point, not having to worry about it. But had that been, there may have been some suspicious activity that I had missed because that drug lord had actually laundered money through a number of financial institutions. This is something we actually cover in our BSA Bootcamp. That story is covered in there. Fortunately for me, it was not something I had to worry about. That's when negative news should be a red flag indicator for you.
As I mentioned in the beginning of this video, this is just a very small part of what we covered in our BSA Annual Update. We also covered this in our Spring 2021 Quarterly Compliance Update that will be released at the end of April or early May of 2021. Our BSA email update is available in our store. It's current for Spring of 2021, covering all information from January 1st, 2020 through March 31st, 2021. The video program includes quite a bit of things, includes over four hours of video instruction. The last year, January 1st, 2020 through March 31st, 2021 just had a ton of things going on in the world of BSA and anti money laundering. So if you want to make sure that you didn't miss anything, this is a great way to just sit through a checklist to say we got it, we got it. Oh yeah, that's a good refresher. Oh, I better look into this area and it'll help you make sure you don't miss anything and it'll help your regulators know that you're staying on top of regulatory changes because we know that regulators love to see training for BSA officers.
This is something that's available for you. It is a ton of training. We've actually broken it up into seven different videos to make them a little bit shorter and easier to comprehend. There is a downloadable manual that is available for you. That covers everything that you need to know. You can take notes on and reference everything that we've talked about. There's a hundred percent money back guarantee within the first 10 days of purchase. Let's call them calendar days for those of your compliance folks who like to differentiate between business and calendar days. But in the first 10 calendar days, it's a hundred percent money back guarantee. If we don't deliver on the value that we promised, we will return that money to you, no questions asked. We made sure we deliver on that because we don't create any marketing videos till the program is actually completed and done. So we know we're going to deliver on it but it's a low risk way for you to try our programs if you've not tried them before. Our program, of course, comes with a one certificate of completion per enrollment. Now you can see that program where we have a video just like this explaining what's in it and more detail giving you an overview of everything in there. The full curriculum is available on the page in our store compliancecohort.com/store, and look for the topic, BSA Annual Update.
That's all I have for this Compliance Clip.