1. USA PATRIOT ACT
WHAT DOES IT STAND FOR?

2. Uniting and Strengthening America By Providing Appropriate Tools Required to Intercept and Obstruct Terrorism

3. The Act is 342 pages
350 subject areas
21 legal amendments
40 federal agencies

4. 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

5. 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 !!!

6. The Big Three !!! The Bank Secrecy Act
The Customer Identification Program
OFAC

7. 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

8. 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

9. Who Fills Out The CTR ? The employee that accepted the transaction
Head Teller must approve
Must verify identity of the member

10. Do We Tell The Member About The CTR ?
Absolutely Not !!!!!!!!!!!!

11. 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…

12. 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

13. 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

14. What is Unlawful ? Involves money laundering
Designed to evade BSA regulations
Has no apparent lawful purpose

15. 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

16. Other Records Required
Monetary transactions between $3,000 and $10,000
Wires over $3,000

17. 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

18. 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

19. 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)

20. 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

21. Procedures For Opening New Accounts
Turn to page 3 in Bank Secrecy Act Compliance Program

22. 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.

23. 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.

24. 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.

25. 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

26. Maximum Penalty
5 million dollar fine and up to 30 years in prison