Matching Treasury list with member rolls becoming technological necessity

COLUMBIA, S.C. – The national effort to fight terrorism at its financial roots is now posing a challenge to credit unions: How do you match your member rolls against the Treasury Department’s list of more than 7,000 suspected terrorists, international drug dealers and other undesirables? The problem is not just academic. Besides wanting to do the right thing, CUs are required to not do business with anyone on the ever-changing list or face penalties under Office of Foreign Assets Control regulations. Compliance is required by NCUA, which acknowledges that it has placed new emphasis on keeping the list and checking it twice. Credit unions risk losing face and facing fines and even jail time if they don’t block transactions from existing members and stop new accounts from opening under any of those listed names. All such actions must be reported, too, to satisfy NCUA audit requirements. A cottage industry is springing up to help credit unions do just that. Core data processors such as Symitar Systems and ULTRADATA are working with client credit unions to enable them to do the necessary searching of their databases, and one leading vendor, Bridger Systems Inc., Mont., says more than 70 credit unions are using its solution, OFAC Tracker, with that list growing every day. Bridger Systems has been doing OFAC tracking since it signed on American Express as its first client in 1996, says Dave Belote, Bridger’s vice president of marketing. Financial institutions can either use the product as a Windows-based solution in-house or can access it online through a Web browser. At the company’s home page, www.ofaccompliance.com, credit unions can check just one name for free and they also can take advantage of a 45-day, free trial of the full version of OFAC Tracker, Belote says. OFAC Tracker is intended for use with any proprietary or open-system database, and at least one core processor is using it to help its clients search theirs. “Our customers are able to support OFAC requirements using file-building tools from our host processing engine,” says Jan Wilgus, spokeswoman for ULTRADATA owner Harland Financial Solutions (www.harlandfs.com). She says the 425 ULTRADATA credit unions have available to them “the tools and detailed instructions of how to query their database using a standard file-building tool called BUILD.FILE.” Wilgus says that can then be used to create files and download that to OFAC Tracker to compare member names against the OFAC list. Symitar (www.symitar.com) also is helping its 275 credit union clients achieve the same result with a solution that fits easily into its core-processing engine. “In theory, they could do this themselves, but we wanted to provide them with a program they can use with what they already have in place,” says Carl Barlow, Symitar’s manager of product development. The query process allows the teller to check any name against the Treasury database and then categorizes the quality of the match, using algorithms to contend with such things as Ltd. at the end of company names and other variables. While Symitar hasn’t heard of any matches yet from its clients, the batch-processing program allows credit unions to check everything from new members to wire transfers to “ensure they’re not doing business with these people,” said Barbara Henness, Symitar compliance officer. The list of “these people” continues to grow, too. For instance, on Oct. 12, 39 new names were added. While the Treasury Department list is public (www.ustreas/gov.ofac), Bridger Systems also is offering free help in searching databases for the 85 names the FBI sent out recently to financial institutions in confidence. “We’ve been overwhelmed, in a good sense, since Sept. 11,” Belote says. “We’re trying very hard not to capitalize on this, and we think our software is doing a lot of good. The more tracking like this that’s done, hopefully the less chances there’ll be for tragedies like this in the future.” Besides simply checking the list against member rolls, such capabilities also lend themselves to broad-based CRM applications, according to SEDONA Corp. (www.sedonacorp.com) That King of Prussia, Pa., company has incorporated OFAC tracking into its Intarsia customer-relationship management package, allowing checking against the Treasury list throughout the organization, from account creation on. “Few people realize how powerful a CRM system can be in helping financial institutions comply with the many regulations in today’s business environment,” says Alyssa Dver, SEDONA’s chief marketing officer. And it’s not just terrorists suspected in the September attacks that are on the list. Sanctions against a number of countries, such as Sierra Leone, are on there, as well as concerns about purveyors of elements of weapons of mass destruction. “We’ve long been used to IRS and dividend reporting,” observed Barlow at Symitar. “This is all a little different.” -