Bank Secrecy Act Training Requirements

Training is a core requirement of a satisfactory Bank Secrecy Act and Anti-Money Laundering (BSA/AML) compliance program.¹ At a minimum, a BSA/AML training program must provide training for all personnel whose duties require knowledge of the BSA. While BSA/AML training is required, banks have flexibility in the way they design the training program. Effective training programs provide employees with a clear understanding how BSA/AML and OFAC² regulations affect their specific jobs.

While the regulatory requirement for providing BSA/AML training is clear, examiners often receive questions about how to adjust training programs to address employees’ job responsibilities. This article is intended to provide general guidelines for developing BSA/AML and OFAC training programs that address employees’ specific job responsibilities.

Staff training

Many community banks provide training programs that cover all BSA/AML and OFAC-related regulations and topics. In this type of training, employees in various positions receive the same training even though their BSA/AML and OFAC responsibilities are generally different. The training would include an overview of the primary BSA/AML and OFAC regulations and the bank’s corresponding policies, procedures and processes. This approach is particularly useful for banks where staff is limited and employees may have several job functions, requiring each employee to have a broad-based understanding of BSA/AML and OFAC-related requirements. For instance, an employee in an operation role would receive basic BSA/AML and OFAC training sufficient for the employee to understand the applicable requirements for a teller position. This methodology provides greater flexibility in staffing and gives bank management the assurance that staff receives training on all BSA/AML and OFAC fundamental requirements.

A general training approach is acceptable, and in many cases preferred, by management at smaller banks. However, management at larger banks may find it more efficient to provide training programs that address BSA/AML and OFAC-related responsibilities by job category. If all employees within a job category have the same or very similar BSA/AML and OFAC responsibilities, bank management may choose to provide training that addresses the specific BSA/AML and OFAC-related responsibilities of individuals in each job category. Examiners are often asked how to structure training to address employees’ specific job responsibilities. Here are some training topic suggestions for common bank positions. We hope you find them helpful!

Frontline staff and tellers:
Depending on the duties of frontline staff, training typically includes requirements for OFAC (if applicable), Currency Transaction Reports (CTR), monetary instruments, identifying suspicious activity and Suspicious Activity Reports (SAR). If frontline staff open accounts and perform account maintenance, they are also trained on the customer identification program (CIP) and customer due diligence (CDD) requirements, including examples of suspicious activity.

Lenders:
Training often includes requirements for OFAC (if applicable), CIP, CDD, CTRs, SARs and identifying suspicious activity related to lending.

Operations staff:
Training usually includes requirements for OFAC (if applicable), wire transfers, automated clearinghouse (ACH), debit/credit transactions, international transactions, SAR requirements and identifying suspicious activity related to various financial products and services provided by the bank.

New staff:
New employees typically receive an overview of BSA/AML requirements during employee orientation. Employees who have positions that require them to perform BSA/AML and/or OFAC duties also receive thorough training related to these duties prior to starting in the position.

BSA officer:
The BSA officer is expected to be fully knowledgeable about the BSA and all related regulations. Training is ongoing and may include BSA/AML-related conferences, seminars, webinars or training associated with acquiring BSA-related designations. Due to the heightened knowledge and expertise required for BSA officers, their training requires resources beyond reading periodicals and online articles and/or completing general staff training.

Board of directors:
In order to provide oversight to the organization, directors need a basic understanding of BSA/AML and OFAC, including the importance of the regulatory requirements, the ramifications of noncompliance and the risks posed to the bank. The board should be informed about changes and new developments in the BSA, its implementing regulations and directives, and the federal banking agencies’ regulations.

Conclusion

Regardless of how BSA/AML and OFAC training programs are designed, it is important to ensure that staff training is ongoing, is documented and incorporates current developments and changes to BSA/AML-related regulations. The training program should ensure that all employees understand their role in maintaining effective BSA/AML and OFAC compliance programs.

Endnotes

1 31 USC 5318(h)(1)(c) and 31 C.F.R.1020.210 (b)(4).

2 FFIEC BSA/AML Examination Manual, “OFAC Compliance Program,” p. 145.