An independent audit of a bank’s Bank Secrecy Act (BSA) and anti-money laundering (AML) programs should generally be conducted every 12 to 18 months, depending on the bank’s risk profile. This regulatory expectation and the minimum requirements for an independent audit, including testing for compliance, were emphasized in a May 16, 2008, Financial Institution Letter (FIL-38-2008) issued by the Federal Deposit Insurance Corporation (FDIC).

Internal auditors have traditionally entered banking with accounting or business degrees and risen through the ranks. In a sign that internal auditing is truly becoming a “hot” career choice, a number of domestic and foreign colleges and universities participate in the Internal Auditing Education Partnership (IAEP), sponsored by The Institute of Internal Auditing (IIA). Through their participation, these institutions now offer courses and programs specifically designed to produce newly minted internal auditors ready for the job market.

On April 24, 2008 FinCEN proposed amendments to the section of the BSA regulation that allow depository institutions to exempt transactions of certain persons from the requirement to report transactions in currency in excess of $10,000. Comments must be received on or before June 23, 2008.

On April 16, 2008, FinCEN assessed a $12,000 civil money penalty against a Tampa, Florida-based MSB, El Noa Noa Corporation, for failure to establish and implement an anti-money laundering program with internal controls and other measures reasonably designed to prevent the money service business from being used for money laundering. According to the complaint, FinCEN said that El Noa Noa acted with “reckless disregard” of BSA requirements and failed to file at least 66 Currency Transaction Reports (CTRs) over eighteen months. They did not implement a written AML program although they were notified about the need to do so at least three times. El Noa Noa is a money services business that has operated in Tampa, Florida since 1998. It provides check cashing, wire transfer, and money order services to its customers. The Internal Revenue Service, Small Business/Self-Employed Division examined El Noa Noa for compliance with the Bank Secrecy Act and its implementing regulations. Some MSBs are classified as high-risk accounts under the BSA and all are subject to BSA recordkeeping and reporting. What are your responsibilities when you open and maintain accounts for this type of business?