A thorough examination of the impending effects of New York State Department of Financial Services Rule 504 by A&M's Hal Crawford...
Some ways to comply:
- Risk assessments (RA) of your institution and business units
- Reviewing compliance with all current BSA / AML laws, regulations and alerts
- Mapping BSA / AML risks to your institution’s businesses, products, services and customers
- Utilizing BSA / AML detection scenarios that are based on your institution’s RA
- Implementing technology or tools for matching names and accounts
- End-to-end, pre-and post-implementation testing
- Watch list screening that reflects current regulatory requirements
- Developing easily understandable documentation that articulates your institution’s current detection scenarios
- Auditing investigative protocols
- On-going analysis to assess the logic and performance of the technology for matches, watch lists and threshold settings
- On-going assessments of the relevancy of the transaction detection scenarios, rules, thresholds, parameters and assumptions
The potential disconnect between purpose, response and effectiveness can be reconciled. It is important for banking institutions to understand the particularities of the rule and assess next steps. Definitively, not all institutions will be directly in the purview of this rule. However, the rule’s scope has a much broader reach than may be apparent from simply reading the regulation’s text. While the effect of the rule is dependent, in part, on the interpretation by individual institutions across the industry, most financial institutions can expect to experience ramifications of an industry-wide response due to NYSDFS’s jurisdiction and its extraterritorial reach. Namely, New York State is a banking and financial hub not only for National banks with branches or agencies around the country but also for international banks with branches or offices in the U.S.