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Guidance for Banks Regarding Money Laundering

The Office of the Comptroller of the Currency (OCC) has issued guidance to financial institutions about when OCC will cite banks for violations or take other enforcement actions against them to prevent money laundering. The guidance notes that a financial institution can be cited if its security program is lacking; for example, if internal controls, independent testing, or personnel training is absent or inadequate. Also a possible compliance violation, according to the guidance, is a program that has shortcomings coupled with highly suspicious activity, such as evasion of reporting requirements along with repeat failures to file suspicious activity reports. The guidance also sets out examples of when financial institutions should file suspicious activity reports. If a bank is unsure whether an issue should be reported, it should examine whether it has a reasonable explanation for an unusual transaction after evaluating the facts. If not, the transaction should be considered suspicious and should be reported. In its guidance, the OCC also reminded banks that federal law provides protection against liability when a bank discloses customer financial records to law enforcement in compliance with money laundering regulations.money_laundering0205.pdf