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OCC Highlights, AML & CRA Risks

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This blog post was co-authored by: Connor Opalka 

Bank Compliance Executives can rest easier at night knowing they receive insights from Perficient’s Financial Services Risk and Regulatory Center of Excellence (CoE).   

In this article, we highlight the key emerging industry compliance risks as they were outlined by the Office of the Comptroller of the Currency’s (OCC) National Risk Committee in their recently released Semiannual Risk Perspective.  

 Navigating AML and OFAC Compliance Risks 

Regarding anti-money laundering (AML) and Office of Foreign Assets Control (OFAC) compliance risks, bank executives must navigate operational and compliance challenges tied to fintech relationships.  

  • Manage third-party risks, especially for relationships involving higher-risk or critical activities. 
  • Contracts should explicitly address potential default and termination.
  • Identify nested relationships where fintech firms serve other fintech firms.  

 Adapting to the New Payment Landscape 

As new payment methods continue to emerge, such as FedNow’s instant payments, it’s important that banks continuously evaluate their BSA/AML risks and corresponding controls to keep pace with new or changing risk profiles.  

While the digital landscape continues to expand, another risk banks need to be wary of is scams. An emerging scam known as “pig butchering” was recently flagged by the Financial Crimes Enforcement Network (FinCEN). This particular scam involves criminals building trust with victims in digital relationships before persuading them to invest in cryptocurrency platforms, ultimately leading to financial losses.  

Other, traditional financial crime risks, especially fraud, continue to demand banks’ vigilance. Significant increases in Suspicious Activity Reports (SAR) filings related to fraud highlight the importance of effective processes to prevent, identify, and file SARs within a timely manner. Banks must uphold responsibilities under the current Customer Due Diligence and Beneficial Ownership Rule and the other existing BSA requirements. *    

*Note that the AML Act of 2020 requires the issuance of changes to the Customer Due Diligence and Beneficial Ownership Rule. Once published by regulators, Perficient’s Risk and Regulatory CoE will be here to walk our clients through the changes. 

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Modernizing CRA Regulations 

Managing compliance risk frameworks in alignment with existing risk profiles is crucial as customer needs evolve. As for rising interest rates, banks may experience an increase in relief requests under the Servicemembers Civil Relief Act, particularly for adjustable-rate credit products. Additionally, the recent rule by the OCC, the Federal Reserve, and the FDIC strengthens and modernizes Community Reinvestment Act (CRA) regulations.  

The effective date of the new rule is April 1, 2024, with key provisions taking effect on January 1, 2026, and January 1, 2027. Banks need to plan for these changes and begin to implement management processes to address the potential impact of the rule on their systems and resources. 

Your Expert Partner 

Perficient’s Financial Services Risk and Regulatory CoE will continue updating our audience with more upcoming articles dissecting the 1,400+ page CRA.  

Contact us today to discuss in depth how we can help tackle your business challenges. We also invite you to explore our financial services solutions and expertise.  

LEARN MORE: Regulatory Risk & Compliance in Financial Services 

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Carl Aridas

Carl is certified in the Scaled Agile Framework (SAFe), a Scrum Master, and a Six Sigma Green Belt project manager with more than 25 years of experience in financial services overseeing large-scale development global, multi-currency accounting, regulatory reporting, and financial reporting software platforms. He has hands-on experience completing, reviewing, and filing Federal Reserve, FFIEC, and IRS reports, including Call Reports, Y9C reports, 2900 reports, TIC reports, and arbitrage rebate reports.

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