Banking and Finance Law Daily Wrap Up, BANK SECRECY ACT—Montana bank agrees to improved BSA/AML compliance and risk management, (May 8, 2024)

By WK Editorial Staff

By entering into a Written Agreement, First Citizens Bank of Butte demonstrates its commitment to operating in compliance with all applicable federal and state laws, rules, and regulations.

Montana-based First Citizens Bank of Butte has entered into a Written Agreement with the Montana Division of Banking and Financial Institutions and the Federal Reserve Bank of Minneapolis. The Written Agreement is a result of deficiencies identified during a recent examination of the bank's risk management and compliance with anti-money laundering (AML) requirements. The examination found that the bank had failed to comply with various federal laws, rules, and regulations related to AML compliance, including the Bank Secrecy Act (BSA) and its reporting requirements (Written Agreement Between First Citizens Bank of Butte and Federal Reserve Bank of Minneapolis, Docket No. 24-010-WA/RB-SM (May 2, 2024)).

Enhancing board and management oversight. Under the terms of the agreement, the bank's board of directors is required to submit a written plan within 60 days to enhance board and management oversight. This plan should outline specific actions the board will take to maintain effective control and oversight of the bank's major operations and activities, including internal controls and audit processes. It should also outline measures to ensure compliance with applicable laws and regulations and the provision of adequate resources for maintaining a robust AML compliance program.

BSA/AML compliance improvements. Additionally, the bank must submit a written plan to improve its BSA/AML compliance program within the same 60-day timeframe. This plan should include measures to strengthen internal controls, such as customer due diligence and suspicious activity monitoring and reporting. The bank is also required to appoint a qualified BSA/AML compliance officer who will be responsible for implementing and maintaining an effective compliance program.

Customer due diligence program. Within the next 60 days, the bank must also submit a revised customer due diligence program. This program should include risk-based policies and procedures for collecting and verifying customer information, a plan to remediate any existing deficiencies, and an enhanced methodology for assigning risk ratings to account holders.

Suspicious activity reporting. To ensure the identification and reporting of suspicious activity, the bank is required to submit a written program within 60 days. This program should include effective monitoring of customer accounts, escalation of potentially suspicious activity to senior management, and proper documentation of investigations.

Progress reports. Finally, the bank is required to provide progress reports to the regulatory authorities every quarter. These reports should outline the actions taken to achieve compliance with the agreement and the results thereof.

Companies: First Citizens Bank of Butte

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