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NCUA Clears Up Some Confusion for Corporates and Bank Secrecy Act

ALEXANDRIA, Va. - Corporates have been asking for it, and they got it - guidance from NCUA on complying with the Bank Secrecy Act. The main point of confusion for corporates was how can they report on what individuals do in terms of suspicious wire transfers under BSA, when the...

By Staff Writer | Updated on July 06, 2004

ALEXANDRIA, Va. – Corporates have been asking for it, and they got it – guidance from NCUA on complying with the Bank Secrecy Act. The main point of confusion for corporates was how can they report on what individuals do in terms of suspicious wire transfers under BSA, when the natural person CUs are driving that. “Typically a wire transfer is conducted through the corporate credit union, acting as the intermediary financial institution, by transferring the funds out of the credit union account with the corporate and into the Federal Reserve Bank. In that situation the originator of the transaction, the natural person credit union member, is not a member of the corporate and the corporate credit union will not have any knowledge of the normal transaction activity for the member,” wrote NCUA, thus the responsibility of BSA monitoring in this case belongs to the natural person CU. In contrast, however, NCUA wrote that corporates should be aware of the typical account activity in accounts it monitors for its CU members. In those cases, it has the responsibility to ensure BSA compliance. “This is a smart way to regulate. Issuing a guidance letter like this now cuts through a lot of the red tape and legal fees corporates would have had to go through. Now they can use the money to implement programs,” said Mike Canning, executive director of the Association for Corporate Credit Unions.

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