Treasury guidance on money laundering includes credit unions

WASHINGTON – The Treasury Department has issued interim guidance, covering credit unions, regarding compliance with the USA PATRIOT Act, a bill passed in October including counter-money laundering provisions. Two anti-money laundering provisions become effective December 25. Beginning on Christmas Day, 2001, financial institutions in the U.S. will be prohibited from providing correspondent accounts directly to foreign shell banks and should avoid such activity in the future, as well as verifying the identification of account owners and maintaining such records. “I can’t imagine there are going to be too many credit unions in that category,” NCUA Director of Public and Congressional Affairs Cliff Northup said. He added that Treasury has the authority to exempt certain institutions in implementing the rules, particularly smaller institutions. Foreign shell banks that are affiliates of a depository institution, credit union, or foreign bank that maintain a presence in the U.S. or a foreign country and is subject to supervision by a banking authority are exempted from the limitations on correspondent accounts. This interim guidance will remain in effect until a regulation or subsequent guidance is put into place. Northup said that NCUA will have a chance to create “similar but unique” regulations for credit unions. NCUA Associate General Counsel Alan Meltzer will be taking the lead on this issue at NCUA. After the law has been in effect 30 months, NCUA will recommend amendments to the laws and regulations. The USA PATRIOT Act amends money laundering provisions of the Bank Secrecy Act “to make it easier to prevent, detect, and prosecute international money laundering and the financing of terrorism,” according to the Treasury guidance. The interim guidance is available at the Treasury Department’s Web site. (www.ustreas.gov)