What BSA monitoring procedures must state member banks maintain? Answer in under 100 words. Cite only eCFR (www.ecfr.gov) sources.

Details / How it works

12 CFR 208.63 requires every state member bank to develop and provide for the continued administration of a BSA compliance program reasonably designed to ensure and monitor compliance with the recordkeeping and reporting requirements of subchapter II of chapter 53 of title 31, United States Code, and the implementing regulations at 31 CFR Part 103. The program must be reduced to writing, approved by the board of directors, and noted in the minutes.

Each bank is also subject to the customer identification program requirements of 31 U.S.C. 5318(l) and the implementing regulation at 31 CFR 103.121, which must be implemented as part of the BSA compliance program.

Required components of the compliance program

The compliance program must, at a minimum, include the following four elements:

1. Internal controls — a system to assure ongoing compliance with the Bank Secrecy Act.
2. Independent testing — testing for compliance to be conducted by bank personnel or by an outside party.
3. Designated individual(s) — a compliance coordinator responsible for coordinating and monitoring day-to-day compliance.
4. Training — training for appropriate personnel.

Exceptions & edge cases

While 12 CFR 208.63 governs state member banks, the analogous requirements for national banks and savings associations are found at 12 CFR 21.21, which similarly requires a written BSA compliance program with internal controls, independent testing, a designated compliance officer, and training, plus a customer identification program under 31 U.S.C. 5318(l) and 31 CFR 1020.220.