On April 15, 2020, the Federal Financial Institutions Examination Council issued an partial update to the Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual (Manual), revising the introductory sections of what has become known as the “bible” of bank examinations.
Nonprofits, industry, financial institutions and other government agencies have eagerly awaited revisions to the Manual, which was last revised in 2014. These most recent changes are just a small portion of the 442-page book.
According to the FFIEC (which includes the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, and State Liaison Committee), the update does not impose new requirements but rather increases transparency around BSA/AML examination process. Most of the updates “emphasize and enhance the Agencies’ risk-focused approach to BSA/AML supervision,” according to an FFIEC statement. For example, revisions to the updated sections emphasize the need for examiners to evaluate a bank’s BSA/AML compliance program based on its risk profile for money laundering, terrorist financing, and other illicit financial activities. Revisions also ensure a clear distinction between mandatory regulatory requirements and supervisory expectations.
The Manual reminds examiners “that banks have flexibility in the design of their BSA/AML compliance programs, and
minor weaknesses, deficiencies, and technical violations alone are not indicative of an inadequate program,” the statement notes.