On April 3, 2020, the Financial Crimes Enforcement Network (FinCEN) issued an update notice to financial institutions related to the COVID-19 Pandemic, covering five primary topics: Compliance with BSA Obligations FinCEN emphasized the continued importance of BSA compliance in protecting national security by combating money laundering and related crimes, including terrorist financing. It is expected [...]
In December of 2019, one might have said it would take a natural disaster for CECL to be delayed for those required to comply in the first quarter of 2020. Fast forward to March 13, and we have the equivalent as the President declared a national emergency related to the coronavirus/COVID-19 outbreak. In response, the [...]
The business disruption associated with the COVID-19 virus is both unprecedented and extraordinary. As financial markets in the United States see record declines, financial institutions find themselves in the unique position of seeking to execute pandemic plans, while preparing for potentially robust activity as a delivery channel for the U.S. government's massive stimulus package. As [...]
Community banks face many challenges during the COVID-19 pandemic. Bankers should evaluate current functions and activities throughout this uncertain time. Below you can find CRI's community bank COVID-19 checklist, by functional area, to be used as a resource to assist in this evaluation process. General Ensure effective communications are ongoing with bank customers and employees [...]
The Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), Office of the Comptroller of the Currency (OCC), Consumer Financial Protection Bureau (CFPB) and Conference of State Bank Supervisors (from now on referred to as the Agencies) have issued the Interagency Statement on Loan Modifications [...]
A new law enacted late in 2019 made a significant change in the minimum distribution requirements for individual retirement accounts (IRAs). The “Setting Every Community Up for Retirement Enhancement” (SECURE) Act became effective on December 20, 2019, and it raised the required minimum distribution (RMD) age from 70½ to 72 for individuals who will reach [...]
The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) is getting more attention as financial institutions increase assets through mergers and acquisitions as well as organic growth. Bankers need to understand the requirements of this guidance at the $500 million and $1 billion asset thresholds in order to successfully implement FDICIA to prevent external [...]
Background – Legislation Effects The Controlled Substances Act of 1970 made all forms of cannabis an illegal Schedule 1 substance. Today, 33 states, plus the District of Columbia, have legalized marijuana for medical use, and 11 states allow recreational use of marijuana for adults over the age of 21. On December 20, 2018, the Agricultural [...]
The Agriculture Improvement Act of 2018 (or the 2018 Farm Bill), which removed hemp as a Schedule 1 controlled substance under the Controlled Substance Act, became law on December 20, 2018. The 2018 Farm Bill directs the United States Department of Agriculture (USDA), in consultation with the U.S. Attorney General, to regulate hemp production. The [...]
On October 17, 2019, the Federal Financial Institutions Examination Council (FFIEC) issued the much-anticipated proposed draft Interagency Policy Statement on Allowance for Credit Losses (ACLs). The agencies issued the draft in response to changes in the accounting for credit losses under the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 326 (most commonly [...]
The current expected credit losses (CECL) journey began with the issuance of an exposure draft in 2010, continued with the issuance of a supplementary document in 2011, and an additional exposure draft in 2012. After much debate and over 3,300 comment letters, the Financial Accounting Standards Board (FASB) released the much-anticipated Accounting Standards Update (ASU) [...]
AML Perspectives Human trafficking is recognized as one of the fastest growing criminal enterprises, and with it comes unique challenges for AML professionals tasked with the detection and related reporting of money laundering red flags. The United Nations Office on Drugs and Crime define human trafficking as “the recruitment, transportation, transfer, [...]
AML Perspectives Much has been made of the “Beneficial Ownership Requirements for Legal Entity Customers,” which went into effect July 11, 2016, with a compliance date May 11, 2018. In fact, on the surface, one could mistakenly ascertain FinCEN’s final rule related solely to beneficial ownership. Furthermore, there are indications that [...]
AML Perspectives The Bank Secrecy Act (or “BSA”) has long been part of the regulatory landscape as a fundamental component of the safety and soundness process. In fact, most professionals who currently work for or with financial institutions do not recall when BSA was not a critical component of the financial institution [...]
AML Perspectives Prevailing FFIEC guidance indicates the Bank Secrecy Act/Anti-Money Laundering (BSA/AML) risk assessment is fundamental to achieving an effective risk-based BSA/AML compliance program. In fact, the FFIEC BSA/AML Examination Manual emphasizes that examiners evaluate the financial institution’s risk assessment as part of the planning and scoping phase of the examination. [...]
AML Perspectives The challenges of BSA/AML compliance continue to evolve for financial institutions as they seek to meet heightened regulatory expectations in areas such as Customer Due Diligence (CDD) or in automating monitoring processes, all while effectively managing the associated cost of ongoing compliance. In the meantime, the Financial Action Task [...]
Although much has changed for financial institutions since the Committee of Sponsoring Organizations (COSO) issued the Enterprise Risk Management (ERM) – Integrated Framework in 2004, much has remained the same. A financial services professional need only check their inbox or scroll through their newsfeed to ascertain that financial institutions, both large and small, are holding [...]
Just as a mountaineer needs a well-trained glacier team to reach the summit of Everest, community banks need effective audit committees to be successful in today’s challenging and changing regulatory and accounting environment. Audit committees provide needed oversight in the areas of risk management and financial reporting. An engaged audit committee is an important attribute [...]
Approximately 2.1 million Americans get married every year, and that number is continuing to rise. As the economy has improved and the banking industry has recovered from the mortgage meltdown, bank marriages (a.k.a., financial institution mergers and acquisitions) are also now in vogue. The banking industry is feeling pressure to tie the knot and “grow the [...]
Since bank examiners pay special attention to the allowance for loan and lease losses (ALLL) as part of a regulatory examination, it doesn’t pay for community banks’ management to stick their heads in the sand. Why? The consequences of a bank’s ALLL being underfunded can be steep and may include: Downgrading the bank's CAMEL rating. [...]
