Credit union BSA practices under the microscope again

The Wall Street Journal is the best paper in America but if all you did was read the Journal, you could be forgiven for thinking that credit unions, as opposed to the megabanks which simply ignore BSA requirements and then pay large fines, are the biggest weakness in the country’s anti-money laundering framework.

The latest CU to find itself in the WSJ’s crosshairs is $24 billion PenFed Credit Union. According to the article in the WSJ, in 2016 and 2017 staff members at the credit union were concerned enough about inadequacies in the credit union’s AML compliance framework that they raised their concerns with senior staff and regulators. Specifically, the Journal reports that concerns were raised about “understaffing, gaps in reporting of potentially suspicious transactions to the government, insufficient monitoring of wire transfers, a lack of anti-money-laundering training for senior leaders and inadequate scrutiny of potentially high-risk customers.” The Journal points out that many of these concerns are raised during a time of fast growth by the credit union which is the third largest in the country.

Buried a little deeper in the article we find out that PenFed’s program was subject to a document of resolution and there is no suggestion that the problems highlighted in the article haven’t been addressed or resulted in money laundering activities.

 

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