by: Henry Meier
If you were sitting around the Thanksgiving table struggling to come up with things to be thankful for, then here’s one for you, after the fact: be thankful you are not associated with the North Dade Community Development Federal Credit Union located in Miami, Florida.
The Tuesday before Thanksgiving the $4 million credit union was slapped with a $300,000 fine for significant Bank Secrecy Act (BSA) violations. According to FinCEN, from 2009-2014, the credit union had significant deficiencies in all aspects of its anti-money laundering (AML) program, even as it processed close to $2 billion in transactions for money service businesses (MSB). FinCEN’s fine follows a 2013 Cease and Desist order issued against the credit union by NCUA.
If this were simply the story of one rogue credit union that let the income it was generating from MSBs blind it to its regulatory obligations, the story wouldn’t be worth a second look. But that’s not all that is going on here. Most importantly, regulators are increasingly concerned about credit unions that work with MSBs within their fields of membership. For instance, in January of this year, the NCUA listed oversight of credit union MSB relationships as one of its top regulatory priorities. In addition, a BSA Webinar hosted by the Office of Small Credit Union Initiatives emphasized the enhanced obligations that credit unions have when their membership includes MSBs. More generally, since 2005, regulators have stressed that when any financial institution provides services to an MSB, it takes on additional due diligence obligations.continue reading »