FinCEN will now begin sharing draft reports about credit unions with the NCUA to ensure they're accurate, NCUA Chairman Debbie Matz told CU Times.
The announcement came just days after the Wall Street Journal reported that the Treasury Department's Financial Crimes Enforcement Network (FinCEN) is scrutinizing more than 50 credit unions that may be particularly vulnerable to potential money laundering.
The confidential FinCEN report did not accuse any credit unions of wrongdoing, according to the Wall Street Journal, but it did highlight increasing relationships with check-cashing companies and other firms FinCEN calls money-services businesses. Criminal groups and drug-trafficking organizations could be targeting credit unions via MSBs to gain access to the formal financial system, it reported.
FinCEN informed the NCUA earlier this year that a classified report about credit unions had been issued to certain law enforcement agencies, Matz told CU Times. Matz said she scheduled a meeting with FinCEN director Jennifer Shasky Calvery after becoming aware of the issue.
"Director Shasky Calvery agreed that FinCEN and NCUA should work collaboratively on issues concerning credit unions. As a result of the meeting, FinCEN agreed to share draft reports with NCUA to ensure accuracy before FinCEN issues future reports," Matz said.
Matz did not comment on whether the FinCEN report contained inaccuracies.
"I am not at liberty to speak about the details in the FinCEN report, because it is classified," she said. "However, the FinCEN report is an analysis that arrives at a conclusion that credit unions already know: The presence of large amounts of cash in money-services businesses poses risk. NCUA expects credit unions to manage that risk and issued a letter to credit unions last December. While FinCEN enforces the Bank Secrecy Act, it's NCUA's responsibility to make sure credit unions comply with the law."
Matz said FinCEN does not have a legal obligation to share draft reports with the NCUA but said financial institutions regulators have a memorandum of understanding governing how the NCUA supervises the Bank Secrecy Act.
"We look forward to working collaboratively together in the future," Matz said.
NAFCU Senior Vice President of Government Affairs and General Counsel Carrie Hunt responded to the news, noting that Bank Secrecy Act compliance remains a top focus of NAFCU members.
"It is vital that FinCEN coordinate with NCUA effectively and transparently every step of the way to ensure that accurate information is being promulgated about individual credit unions," she said.
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