USA PATRIOT ACTUSA PATRIOT ACT

WHAT DOES IT STAND FOR?WHAT DOES IT STAND FOR?

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

The Act is 342 pagesThe Act is 342 pages 350 subject areas350 subject areas 21 legal amendments21 legal amendments 40 federal agencies40 federal agencies

Whets The Purpose of the Act Whets The Purpose of the Act

To increase anti-money laundering efforts To increase anti-money laundering efforts and eradicate the financing of terrorismand eradicate the financing of terrorism

Title 3 of the Act supplements the Bank Title 3 of the Act supplements the Bank Secrecy ActSecrecy Act

Tighten compliance requirements for all Tighten compliance requirements for all financial institutions and add new record financial institutions and add new record keeping and reporting requirements keeping and reporting requirements

What Are We Responsible For ?What Are We Responsible For ?

Establishing an anti-money laundering Establishing an anti-money laundering policypolicy

Implement minimal standards to verify the identity of each member when opening a new account

KNOW WHO YOU ARE DEALING WITH !!!

The Big Three !!! The Big Three !!!

The Bank Secrecy ActThe Bank Secrecy Act The Customer Identification ProgramThe Customer Identification Program OFACOFAC

The Bank Secrecy ActThe Bank Secrecy Act

Established in 1970Established in 1970 Requires financial institutions to report Requires financial institutions to report

certain transactionscertain transactions Designed to deter and detect money Designed to deter and detect money

laundering effortslaundering efforts Amended approximately 52 timesAmended approximately 52 times

Currency Transaction Reports (CTR)Currency Transaction Reports (CTR)

Report Multiple Cash Transactions > $10,000 Report Multiple Cash Transactions > $10,000 Report Individual Cash Transactions > $10,000Report Individual Cash Transactions > $10,000 The CTR must be sent to the IRS within 15 days of The CTR must be sent to the IRS within 15 days of

the transactionthe transaction Transaction over $10,000 over a period of days if Transaction over $10,000 over a period of days if

deemed suspiciousdeemed suspicious Must keep records for 5 yearsMust keep records for 5 years

Who Fills Out The CTR ? Who Fills Out The CTR ?

The employee that accepted the transactionThe employee that accepted the transaction Head Teller must approveHead Teller must approve Must verify identity of the memberMust verify identity of the member

Do We Tell The MemberDo We Tell The Member About The CTR ? About The CTR ?

Absolutely Not !!!!!!!!!!!!Absolutely Not !!!!!!!!!!!!

Exemptions Exemptions

Banks and Credit UnionsBanks and Credit Unions Federal, state or local governmentsFederal, state or local governments Payroll companiesPayroll companies Lawyers, accountants, doctors investment Lawyers, accountants, doctors investment

advisors, real estateadvisors, real estate Dealers in automobiles, boats, equipmentDealers in automobiles, boats, equipment

etc…etc…

Suspicious Activity ReportSuspicious Activity Report

Should file a SAR with the appropriate Should file a SAR with the appropriate federal law enforcement agencies and the federal law enforcement agencies and the Department of the Treasury by sending a Department of the Treasury by sending a activity report to FinCen (Financial Crimes activity report to FinCen (Financial Crimes Enforcement Network)Enforcement Network)

Should be filed within 30 days Should be filed within 30 days

When Do You File a SAR ?When Do You File a SAR ?

Insider abuse involving any amountInsider abuse involving any amount Transactions aggregating $5000 or more Transactions aggregating $5000 or more

when the person can be identifiedwhen the person can be identified Transactions of $25,000 or more regardless Transactions of $25,000 or more regardless

if proper identification can be madeif proper identification can be made Any suspicious transactions or sequence of Any suspicious transactions or sequence of

transactions that are deemed to be unlawfultransactions that are deemed to be unlawful

What is Unlawful ?What is Unlawful ?

Involves money launderingInvolves money laundering Designed to evade BSA regulationsDesigned to evade BSA regulations Has no apparent lawful purposeHas no apparent lawful purpose

SARSAR

Must be filed within 30 daysMust be filed within 30 days Keep records for 5 yearsKeep records for 5 years SAR’s are for any transaction, not just cashSAR’s are for any transaction, not just cash Exemptions- robbery or theft Exemptions- robbery or theft *** If the suspicious transaction involves *** If the suspicious transaction involves

currency over $10,000 then both reports currency over $10,000 then both reports should be usedshould be used

Other Records RequiredOther Records Required

Monetary transactions between $3,000 and Monetary transactions between $3,000 and $10,000$10,000

Wires over $3,000Wires over $3,000

Customer Identification ProgramCustomer Identification Program

Requires each credit union to implement a Requires each credit union to implement a written CIP appropriate for its sizewritten CIP appropriate for its size

Accounts opening proceduresAccounts opening procedures Reasonable procedures for identifying the Reasonable procedures for identifying the

identity of each customer identity of each customer

Minimum RequirementsMinimum Requirements

NameName Date of Birth for individualsDate of Birth for individuals AddressAddress Identification numberIdentification number Must keep information for a minimum of 5 Must keep information for a minimum of 5

years after the account has closedyears after the account has closed

Identity Verification ProceduresNew Members – Each individual who

establishes a new account with Beacon Credit Union must provide the following

information to open a new account:

NameName Date of BirthDate of Birth Residence Address (Street)Residence Address (Street) I.D. Number (SS No., Tax I.D., I.D. Number (SS No., Tax I.D.,

Passport, alien reg. cardPassport, alien reg. card Valid Photo I.D.- Drivers License or Valid Photo I.D.- Drivers License or

Government I.D. (non-expired)Government I.D. (non-expired)

Existing MembersExisting Members – For existing members who – For existing members who are requesting new accounts or services, identity are requesting new accounts or services, identity must must be verified using the above process.be verified using the above process.

UNLESS:UNLESS:Identity was previously verified in accordance with Identity was previously verified in accordance with the policy and procedures, or the employee has a the policy and procedures, or the employee has a reasonable belief that the true identity of the reasonable belief that the true identity of the member has been established.member has been established.

**Must use CIP on **Must use CIP on ALL ACCOUNTSALL ACCOUNTS opened opened

Procedures For Opening New Procedures For Opening New AccountsAccounts

Turn to page 3 in Bank Secrecy Act Turn to page 3 in Bank Secrecy Act Compliance ProgramCompliance Program

Penalties for Non-CompliancePenalties for Non-Compliance

Civil penalties equal to the amount of the transaction Civil penalties equal to the amount of the transaction but not less than $25,000 or more than $100,000;but not less than $25,000 or more than $100,000;

Criminal penalties of a fine of up to $250,000, Criminal penalties of a fine of up to $250,000, imprisonment up to 5 years, or both;imprisonment up to 5 years, or both;

If the activity involves more than $100,000, a fine of If the activity involves more than $100,000, a fine of up to $500,000, imprisonment for up to 10 years, or up to $500,000, imprisonment for up to 10 years, or both.both.

OFACOFAC

OFAC (The Office of Foreign Assets Control) is a OFAC (The Office of Foreign Assets Control) is a division of the U.S. Treasury…division of the U.S. Treasury…

Administers and enforces trade sanctions…Administers and enforces trade sanctions…Against (1) countries, organizations, and individuals Against (1) countries, organizations, and individuals

that sponsor or support terrorist activities, and (2) that sponsor or support terrorist activities, and (2) international narcotics traffickers.international narcotics traffickers.

What Do We Do ? What Do We Do ?

Compare the list against our member database- Compare the list against our member database- Wayne runs the report monthlyWayne runs the report monthly

Compare the list against new members...Compare the list against new members...Compare the list against parties involved in wire Compare the list against parties involved in wire

transfers…transfers…And compare the list against the names on non-And compare the list against the names on non-

member purchasers of monetary instruments.member purchasers of monetary instruments.

What Do We Do If You Have A Hit What Do We Do If You Have A Hit On OFAC On OFAC

Don’t tell the memberDon’t tell the member Continue opening the account or making the Continue opening the account or making the

transactiontransaction Contact Our Compliance Officer Leslie Contact Our Compliance Officer Leslie

MehaffeyMehaffey

Maximum PenaltyMaximum Penalty

5 million dollar fine and up to 30 years in 5 million dollar fine and up to 30 years in prisonprison