The BSA Examiner is a quarterly newsletter of original content published by Wayne Barnett Software.
2022
Volume 87 – 4th quarter
Case #1 – You don’t have to … but heaven help you if you don’t. There is nothing in federal law that requires banks to do OFAC scans after each SDN update. But those that don’t are being harshly criticized by their regulators.
Case #2 – NSF refund update. There’s a lot of speculation and rumor about what’s going on … and I guess we’re adding to it. But we’re trying our best to offer interesting insights.
Case #1 – The cost of failure is high. For years, most institutions have been lackadaisical about OFAC updates, because the risk of banking an SDN was low. But now that the SDN list has grown to more than 30,000 names, the need for stringent update procedures is absolute.
Case #2 – Everyone does it this way … but we bet they won’t anymore. The federal courts system, in a series of actions brought by the Federal Trade Commission (FTC), has determined that NSF fees charged by many banks are an unfair or deceptive act or practice (UDAP). Banks throughout the country are scrambling to adjust their NSF procedures and determine who is entitled to a refund of fees.
Case #1 – Actually, numbers can lie. Check fraud is at an all-time high. City and county government agencies are the preferred targets for professional international thieves, and stopping the losses is more difficult than ever before.
Case #2 – The Church of the Sacred Tax Deduction. An old tax scheme is being marketed again, and bankers that aren’t looking for it may have an uncomfortable meeting with their regulator.
Case #1 – Kids can be expensive. A common theme with embezzlers is that they are loved and trusted by executive management. That often means no one is reviewing their work–and that’s a big mistake.
Case #2 – It’s worth a second look. Most banks won’t recognize the full benefit of the rising interest rates. We tell you why in this story.
Case #3 – Penny wise, pound foolish. Trying to outsmart the regulators is a bad idea. And lately, it’s also a very expensive one.
Case #1 – We don’t do that. Oh, wait a second …. Most banks don’t have procedures to search for mobile deposit fraud. Every bank should –and that’s especially true for banks that don’t offer mobile deposit.
Case #2 – The checklist. Altered checks and fraudulent checks are creating significant losses for community banks. You can’t stop this crime without software.
Case #1 – What’s old is new. The authorization rules for consumer ACH transactions changes on September 17, 2021. This could be bad news for your bank.
Case #1 – Rules and suggestions, you decide. The regulators can’t order a financial institution to buy a BSA system. But they can issue an MRA that can only be resolved with the purchase of a BSA system. We share two stories where this was the case.
Case #1 – Changes are coming, some will be good. Recent changes to federal law will mostly eliminate the beneficial ownership recordkeeping requirements for financial institutions. However, it’s a multi-step process that will take a few years to implement.
Case #1 – It was a moo-ving experience. If you bank originates commercial wires based on the presence of a signature, and you didn’t see the customer sign the request form, your bank is probably breaking the law..
Case #2 – We know it was you … probably. When it comes to commercial wires, the rules for “Proof of authorization” may be more onerous than your bank realizes.
Case #1 – Fried chicken, cooked books. People that own multiple businesses sometimes find creative ways to lower their tax bill, and that’s not always a good thing.
Case #2 – Searching for unlocked potential. A lot of people are looking for a new career or a side-hustle. Sadly, a lot of con men know this and are ready to take advantage of those who are overly trusting.
Case #1 – The crops aren’t the only thing dusty. A BSA officer has to know more than the law. They also must know when a business plan doesn’t sound realistic.
Case #2 – No “fun” in this family’s dysfunction. A family business strategy that doesn’t make sense should be watched closely. In many instances, transaction coincidence indicates criminal enterprise.
Case #1 – It’s not getting any easier. Federal banking agencies described how their organization intends to implement the Beneficial Ownership rules.
Case #2 – These coins aren’t spare change. How do you monitor for bitcoin transactions?
Case #3 – Making his list, checking it once. Should you do FinCEN 314(a) checks on people whose only relationship with your bank is they’re a beneficial owner?
Case #1 – No question about it. An introduction to beneficial ownership, customer relationships and activity monitoring under the Enhanced Due Diligence rules.
Case #1 – Insult to injury. How you could be on the hook for ACH transactions that happened months ago.
Case #2 – Cheap and very good. Criminal services to fraudulently alter a check are inexpensive and easy to obtain, and increasingly causing mobile deposit fraud.
Case #1 – Editors note. Is your cloud-based virtual server is yours alone? Also, how organized crime uses ISOs (private ATMs) to launder money.
Case #2 – A growing trend. The burden of stopping account takeovers rests mostly with your bank. Unfortunately, in most cases, bill-pay transactions aren’t available for review until late in the day.
Case #1 – That cloud is a thunderhead. The cloud isn’t near as safe as the they want you to believe.
Case #2 – More knowledge equals less losses. Finding from a recent white paper on managing losses from DDA charge-offs.
Case #3 – ISO is becoming the new MSB. What you may be required to do if your bank sponsors Independent Sales Organizations (ISOs)–and even if you don’t.
Case #1 – They said what? How your bank may be liable for fraudulent government benefit payments.
Case #2 – Yes ma’am, it’s the law. A lot of examiners believe they have a right to see anything retained by a bank. What does the law say?
Case #3 – Mr. EDD. You have a better chance of finding a “talking horse”, than finding two examiners that agree on what constitutes enhanced due diligence (EDD).
Case #1 – Bigger losses, smaller victims. Recent findings from ACH fraud studies showed smaller banks are increasingly targeted.
Case #2 – He seemed like such a nice young man. Wire fraud involving foreign college students. Be careful allowing wire transfers based on a phone call.
Case #1 – A little here, a little there … dang, it quickly adds-up. Read how organized crime used small-dollar counterfeit checks to steal hundreds of thousands of dollars.
Case #2 – And then, a little bit more. Fraudulent deposits can also be a source of check fraud.
Case #3 – Half just isn’t enough. Independent verification reports show most banks still ignore small cash transactions.
Case #1 – The crops aren’t the only thing dusty. A BSA officer has to know more than the law. They also must know when a business plan sounds feasible..
Case #2 – No “fun” in this family’s dysfunction. A family business strategy that doesn’t make sense should be watched closely. In many instances, transaction coincidence indicates criminal enterprise..
Volume 76 – 1st Quarter
Case #1 – Did I do that? Learn about duplicate check presentment fraud with mobile deposits.
Case #2 – No foundation to build on. How a contractor obtained advances on a construction loan without authorization. No one was watching.
Case #3 – It has to add-up. Does your BSA software vendor provide data-validation tests
Volume 77 – 2nd Quarter
Case #1 – The crops aren’t the only thing dusty. A BSA officer has to know more than the law. They also must know when a business plan sounds feasible..
Case #2 – No “fun” in this family’s dysfunction. A family business strategy that doesn’t make sense should be watched closely. In many instances, transaction coincidence indicates criminal enterprise..
Volume 76 – 1st Quarter
Case #1 – Did I do that? Learn about duplicate check presentment fraud with mobile deposits.
Case #2 – No foundation to build on. How a contractor obtained advances on a construction loan without authorization. No one was watching.
Case #3 – It has to add-up. Does your BSA software vendor provide data-validation tests
