WASHINGTON—The Government Accountability Office (GAO) has released a report on the Bank Secrecy Act (BSA) that includes findings related to credit union enforcement activities.
The report examined, among other objectives, how the Financial Crimes Enforcement Network (FinCEN) and supervisory and law enforcement agencies collaborate and provide metrics and feedback on the usefulness of BSA reporting.
However, GAO found that FinCEN did not consistently communicate available metrics and when FinCEN did so, it did it on an ad-hoc basis, reported Keith Leggett, the former senior vice president and senior economist at the ABA.
According to the report, each federal credit union must receive a BSA examination each examination cycle — although the frequency and scope of these examinations may vary based on the credit union’s size and other risk factors. National Credit Union Administration officials noted that certain small credit unions with limited separation of duties may be examined more frequently.
The Findings
According to the report, NCUA made 50 referrals for potential BSA violations to FinCEN between fiscal year 2015 and 2018.
The most common credit union BSA violations cited by the federal banking regulators were violations of requirements to report suspicious activities, information-sharing requirements, rules for filing of reports, BSA training, and a system of internal controls, Leggett noted.
NCUA accounted for the majority of information-sharing violations, which include a financial institution failing to expeditiously search its records after receiving an information request from FinCEN based on credible evidence concerning money laundering, Leggett said.
More Than 14,500 Exams
Between fiscal year 2015 and the first half of fiscal year 2018, NCUA said it performed 14,575 BSA examinations. During that time period, NCUA found 8,477 BSA violations, which resulted in 4,588 informal enforcement actions. NCUA counts each BSA violation in a Document of Resolution as an informal action.
“However, NCUA did not issue any formal enforcement action against a credit union during that time period,” Leggett said.