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 Procedures New 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