USA PATRIOT ACT WHAT DOES IT STAND FOR?
Uniting and Strengthening America By Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
The Act is 342 pages • 350 subject areas • 21 legal amendments • 40 federal agencies
Whets The Purpose of the Act • To increase anti-money laundering efforts and eradicate the financing of terrorism • Title 3 of the Act supplements the Bank Secrecy Act • Tighten compliance requirements for all financial institutions and add new record keeping and reporting requirements
What Are We Responsible For ? • Establishing an anti-money laundering policy • Implement minimal standards to verify the identity of each member when opening a new account • KNOW WHO YOU ARE DEALING WITH !!!
The Big Three !!! • The Bank Secrecy Act • The Customer Identification Program • OFAC
The Bank Secrecy Act • Established in 1970 • Requires financial institutions to report certain transactions • Designed to deter and detect money laundering efforts • Amended approximately 52 times
Currency Transaction Reports (CTR) • Report Multiple Cash Transactions > $10,000 • Report Individual Cash Transactions > $10,000 • The CTR must be sent to the IRS within 15 days of the transaction • Transaction over $10,000 over a period of days if deemed suspicious • Must keep records for 5 years
Who Fills Out The CTR ? • The employee that accepted the transaction • Head Teller must approve • Must verify identity of the member
Do We Tell The Member About The CTR ? Absolutely Not !!!!!!!!!!!!
Exemptions • Banks and Credit Unions • Federal, state or local governments • Payroll companies • Lawyers, accountants, doctors investment advisors, real estate • Dealers in automobiles, boats, equipment etc…
Suspicious Activity Report • Should file a SAR with the appropriate federal law enforcement agencies and the Department of the Treasury by sending a activity report to FinCen (Financial Crimes Enforcement Network) • Should be filed within 30 days
When Do You File a SAR ? • Insider abuse involving any amount • Transactions aggregating $5000 or more when the person can be identified • Transactions of $25,000 or more regardless if proper identification can be made • Any suspicious transactions or sequence of transactions that are deemed to be unlawful
What is Unlawful ? • Involves money laundering • Designed to evade BSA regulations • Has no apparent lawful purpose
SAR • Must be filed within 30 days • Keep records for 5 years • SAR’s are for any transaction, not just cash • Exemptions- robbery or theft • *** If the suspicious transaction involves currency over $10,000 then both reports should be used
Other Records Required • Monetary transactions between $3,000 and $10,000 • Wires over $3,000
Customer Identification Program • Requires each credit union to implement a written CIP appropriate for its size • Accounts opening procedures • Reasonable procedures for identifying the identity of each customer
Minimum Requirements • Name • Date of Birth for individuals • Address • Identification number • Must keep information for a minimum of 5 years after the account has closed
Identity Verification ProceduresNew Members – Each individual who establishes a new account with Beacon Credit Union must provide the following information to open a new account: • Name • Date of Birth • Residence Address (Street) • I.D. Number (SS No., Tax I.D., Passport, alien reg. card • Valid Photo I.D.- Drivers License or Government I.D. (non-expired)
Existing Members – For existing members who are requesting new accounts or services, identity must be verified using the above process.UNLESS:Identity was previously verified in accordance with the policy and procedures, or the employee has a reasonable belief that the true identity of the member has been established.**Must use CIP on ALL ACCOUNTS opened
Procedures For Opening New Accounts • Turn to page 3 in Bank Secrecy Act Compliance Program
Penalties for Non-Compliance • Civil penalties equal to the amount of the transaction but not less than $25,000 or more than $100,000; • Criminal penalties of a fine of up to $250,000, imprisonment up to 5 years, or both; • If the activity involves more than $100,000, a fine of up to $500,000, imprisonment for up to 10 years, or both.
OFAC • OFAC (The Office of Foreign Assets Control) is a division of the U.S. Treasury… • Administers and enforces trade sanctions… • Against (1) countries, organizations, and individuals that sponsor or support terrorist activities, and (2) international narcotics traffickers.
What Do We Do ? • Compare the list against our member database- Wayne runs the report monthly • Compare the list against new members... • Compare the list against parties involved in wire transfers… • And compare the list against the names on non-member purchasers of monetary instruments.
What Do We Do If You Have A Hit On OFAC • Don’t tell the member • Continue opening the account or making the transaction • Contact Our Compliance Officer Leslie Mehaffey
Maximum Penalty • 5 million dollar fine and up to 30 years in prison