The OCC released its Semiannual Risk Perspective for Spring 2017 which indicates compliance risk remains high. The report notes that high BSA/AML compliance risk is due to 
new/emerging technology which also means new vulnerabilities. BSA issues accounted for about 10% (19% for large banks) of the Matters Requiring Attention (MRA), handed down from the OCC as of the end of 2016. Even with all the emphasis we’ve seen placed on BSA/AML risk, payment systems are still being developed that result in “less transaction transparency”. The report also touched on the fact that refusing to bank certain individuals and businesses isn’t necessarily always the best answer, as it can result in not only negative consequences for you (reputation, loss of opportunity, etc.), but may mean that transactions aren’t monitored and reported as appropriate. Of course, you need to determine whether you can and should enter or maintain a customer relationship based on the perceived risk, but on a large-scale basis, it’s better that transactions are monitored and reported appropriately rather than conducted in a way where no reporting requirements exist.
Also contributing to the high risk rating are the implementation challenges presented by the Integrated Mortgage Disclosure Rules (i.e., TRID), changes to The Military Lending Act (MLA) and the upcoming HMDA compliance changes. The fact that the OCC specifically mentions implementation challenges in connection with these rules likely means you’re going to be asked about them at your next exam, especially if you’re an OCC bank. What issues have you seen? How have they been addressed? Be prepared so you can show you’re on top of it!
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Published
2017/08/17
Diane Dean
