Wachovia Fine Is Lesson For Credit Unions In BSA Compliance
The recent announcement of the $160 million fine on Wachovia Bank, N.A., is a reminder of the importance of Bank Secrecy Act compliance. The judgment, issued Thursday, April 8, by the U.S. Justice Department, is a result of an investigation into Wachovia’s transactions with Mexican currency exchange houses, commonly known as “casas de cambio” (“CDCs”). The agreement also resolves Wachovia’s admitted failure to identify, detect, and report suspicious transactions in third party payment processor accounts.
“The BSA lessons learned by this particular enforcement action are relevant to every credit union,” said John Kilduff, Association VP, Credit Union Services.
“Every financial institution is required to have a robust Bank Secrecy Act-Anti-Money Laundering program in place to identify, monitor, and report unusual activity on Suspicious Activity Reports, particularly extremely high-risk cross-border transaction activity. While it is true most credit unions never experience millions of dollars of wire transfers and monetary instruments funneling through member accounts, in our BSA training program, we always advise credit unions to monitor their own high-risk accounts, whether they’re business accounts, wires, etc.,” Kilduff added.
The Office of the Comptroller of the Currency announced March 17, a $50 million Civil Money Penalty and a Cease and Desist Order against Wachovia Bank, N.A., for violations of the Bank Secrecy Act as part of a coordinated action with the Department of Justice, the Financial Crimes Enforcement Center, and other federal agencies.
Wachovia also entered into a deferred prosecution agreement with the U.S. Attorney’s Office in the Southern District of Florida and the Asset Forfeiture and Money Laundering Section of the Criminal Division of the Department of Justice and agreed to forfeit $110 million to the United States. The Financial Crimes Enforcement Network assessed a $110 million Civil Money Penalty that is deemed satisfied by the forfeiture to the U.S. government.
3 For 2 – 2010 Compliance Training Programs
Sign up for two Credit Union Compliance Training Programs for your staff and/or volunteers and get a third complimentary training program. Available training programs to choose from include:
- Bank Secrecy Act for staff;
- Bank Secrecy Act for Boards/Volunteers;
- Consumer Deposit Accounts;
- Business Deposit Accounts;
- Consumer Lending; and
- Risk Management for Frontline Staff.
Association compliance staff will work with your credit union to schedule dates and times that are convenient for your staff and volunteers. Each training program lasts about 90 minutes and includes training materials, quiz, and training certificate for each participant.
The training investment is $600 per program (plus travel expenses) for credit unions $20 million in assets or more, and $325 per program (plus travel expenses) for credit unions under $20 million in assets.
To take advantage of this promotion, sign up by June 30. For more information about the training program or to find out how to sign up, contact the Association’s Compliance Department at 800-932-0661, Option #3.
Credit Union Compliance Training Programs
AG Warns Of Possible Income Tax & Census Scams
With the April 15 income tax deadline looming, along with the ongoing U.S. Census, Attorney General Tom Corbett yesterday cautioned Pennsylvania consumers to be watchful for possible scams.
Corbett said the majority of these government-related scams are aimed at getting consumers to divulge detailed personal information, including Social Security numbers, bank account and credit card numbers, or account PINs and passwords. This information can be used or resold by identity thieves who steal money from victims’ bank accounts or make unauthorized purchases using their credit cards.
Corbett noted that consumers across the state have been reporting a growing number of tax-related scams as the April 15th filing deadline quickly approaches. Consumers have also expressed concern about potential scams disguised as U.S. Census surveys. He provided additional advice to identify official U.S. Census materials, messages, and personnel.
Read Press Release
PA 2010 Census Participation Slightly Behind 2000
In 2000, the Pennsylvania mail participation rate for the U.S. Census response was 76%. The 2010 response rate is currently 72%. Kentucky, North Carolina, and South Carolina have met or exceeded their 2000 response rate. To find the latest rates for all states, counties, places, towns and townships, visit http://2010.census.gov/2010census/take10map/.
Diebold Delivers On Self-Service Challenges
Diebold, an Association partner through CUNA Strategic Services, is well known for innovative, reliable equipment, but perhaps the greatest reason that your credit union should consider Diebold is its flexibility and breadth.
There is no credit union need too small or too great. Need one ATM? Done! Want to outsource the maintenance and upkeep of your entire ATM fleet, have your branch premises physically secure, and recycle cash at your teller lines? No problem!
Diebold Integrated Services can help you meet the challenges of your self-service delivery channel by providing a single point of contact. Diebold will work seamlessly with your credit union to upgrade technology, enhance service delivery, and improve cost efficiency, customer perception, and service.
For additional information on utilizing Diebold’s vast array of solutions, contact your PCUA Account Executive, or call Diebold at 1-800-806-6827 to learn more about Integrated Services.
Fed Chairman Recognizes Financial Literacy Month
Speaking at the National Bankers Association Foundation Financial Literacy Summit in Washington, D.C., Federal Reserve Chairman Ben Bernanke recognized April as Financial Literacy Month.
Bernanke told the group, “Many American families are struggling in the aftermath of the financial crisis, which reinforces the need for reliable and useful information to facilitate good financial choices. Helping people better understand how to borrow and save wisely and how to build personal wealth is one of the best things we can do to improve the well-being of families and communities.”
On the financial education front, examples of the Federal Reserve's many resources available to the public are:
- an online credit card calculator that helps consumers estimate how long it will take to pay off a credit card bill under different payment scenarios;
- concise brochures – in both English and Spanish – offering consumer tips on such topics as avoiding mortgage foreclosure scams and protecting their checking accounts; and
- interactive Web sites that provide consumers with what they need to know about new protections for credit card accounts and overdraft protection programs that recently took effect.
Frauds & Scams
Frauds & Scams
Fraudulent Cashier Checks
Fraudulent cashier checks, each in the amount of $1,966.35 and bearing the Patriot Federal Credit Union name have been received by various individuals in Illinois, Missouri, Ohio, Georgia, and Texas. The distorted logo does not include the credit union’s address or telephone number.
These cashier checks are accompanied by a letter from West Broadway Exchange, Inc., advising the recipient that “they have been approved to receive a U.S. Government Grant to aid in the PLUS Economic stimulus package (otherwise known as the Economic Recovery & Reinvestment Plan)” and directing them to contact the firm’s Grant Processing Officer to get further instructions.
Patriot FCU is gathering as much evidence as possible to assist in the pursuit and apprehension of the criminal(s). Please contact the credit union if you see or receive one of these items: 717-263-4444, or 1-888-777-9982.
Education & Training
Education & Training
Spring Compliance Council Meetings
April 20 – Harrisburg
April 21 – Monroeville
Regulation E – Overdrafts and EFT; S.A.F.E. Act; General Compliance Update
Join us for a valuable update on compliance concerns. Gain an understanding of recent changes in Regulation E, including opt-in requirements, exceptions, covered transactions, and more. Discuss options for alternative plans for covering overdrafts, limits on fees, and what must be included in your disclosure notices. We will also cover the latest information on the S.A.F.E. Act and how this pending regulation will affect your real estate lending operations. Our speaker, attorney and compliance expert Andrea Stritzke, invites you to bring along your questions on any other compliance issues for a Q & A and general compliance update.
For more information or to register, click here.
Newsmakers
Five credit unions in York County teamed up for the Spring It On! Used Auto Sales Event, April 8-10. The event featured more than 120 Enterprise Cars for sale. Members also had the opportunity to show their support for the American Red Cross by giving blood during the sale. And, for the children, kids could play games, visit with Downtown – the York Revolution mascot, and check out police vehicle displays. A special VIP event was held Thursday, April 8, for those who were pre-approved through their credit union. In all, First Capital FCU, Glatco Credit Union, New Cumberland FCU, White Rose Community Credit Union, and York Educational FCU sold 39 vehicles during the sale.
PACOE FCU, Johnstown, held its 50th annual meeting on April. Sixty-five members attended the dinner and business meeting. Monika Scott, Association Account Executive, presented a clock and plaque to commemorate the occasion.
National News
National News
Flood insurance, COBRA extensions lurch toward vote
WASHINGTON (4/14/10)--Following positive results in a Monday cloture vote, H.R. 4851, the Continuing Extension Act of 2010, needs only Senate approval to be sent to President Barack Obama for full approval.
The legislation, if approved, would extend authorization for the National Flood Insurance Program (NFIP) and continue federal subsidies to COBRA health insurance recipients through April 30. Federal unemployment insurance would be extended until May 5.
NFIP is important to cedit unions because the mortgages they write for properties in a floodplain are required to have flood insurance. Since flood insurance is unavailable in many parts of the country, the NFIP is an important resource to credit unions and other lenders.
Congress did not take any action before its recently concluded spring recess began, and the NFIP and other programs lapsed on March 29. The NFIP cannot issue new flood insurance policies, increase coverage on existing policies, or issue renewal policies until the Congress restores NFIP authority.
A full Senate vote on H.R. 4851 is expected to take place later this week. If amended by the Senate, the bill would return to the House for another vote.
Another customer survey ranks CUs above banks
ANDOVER, Mass. (4/14/10)--Members/customers at credit unions and community banks continue to show much more satisfaction and better advocacy rates than customers of larger regional or national banks, according to a recent study.
ath Power Consulting's Ideal Banking Study 2010 indicates that 50% of credit union members surveyed are highly satisfied with their financial institution, compared to 31% at large regional or national banks and 46% at small local or regional banks.
About 61% said they were likely to recommend credit unions, compared with 51% who were likely would recommend small local or regional banks and 36% who were likely to recommend large regional or national banks.
"The largest financial institutions are trying to replicate the positive experience most customers enjoy in smaller institutions," said Frank Aloi, president of the Andover, Mass.-based banking market research firm. "Customers are most interested in strong service, personal relationships and personal advice. This is where the smaller institutions have an edge."
Consumers surveyed by ath said the most important thing they want in a banking relationship is customer service, followed by convenience, rates and fees, and trust and respect.
The survey also found that problem resolution is not being adequately addressed by most financial institutions. Only 25% of customers who experienced a problem felt it was resolved to their satisfaction. Customers whose problems were resolved satisfactorily were likely to remain satisfied with their banking relationship. More than half said those who did not receive an adequate resolution to their problems were likely to change banks.
"When customer service expectations are met or exceeded, the outcome is a substantial increase in advocacy/referrals, additional product sales and long-term loyalty," Aloi said. "This study shows that banks need to do a better job of meeting and exceeding customer expectations."
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