The Office of the Comptroller of the Currency has updated its Bank Secrecy Act examination guidelines to include details on how to detect money laundering.
The 101-page booklet, mailed to OCC examiners and national banks late last week, recommends strong "know your customer" policies to detect money laundering. The guidelines urge banks to make a reasonable effort to learn the true identity of all customers and their businesses.
"A know your customer policy is obviously crucial on the loan side, but it's also very important on the deposit side," said Robert B. Serino, OCC deputy chief counsel.
The new handbook includes a list of entities that criminals often use to launder money, including casinos, offshore banks, and leather-goods stores. At the request of bankers and examiners, the OCC also added a six-page list of tip-offs to potentially suspicious activities. These red flags include large deposits of $50 and $100 bills, customers who frequently transfer funds among multiple accounts, and business owners who make several deposits on the same day at different bank branches.
The Riegle Community Development and Regulatory Improvement Act of 1994 directed the four bank and thrift agencies to beef up their procedures to detect money laundering. The Federal Deposit Insurance Corp. updated its Bank Secrecy Act exams in May; the other regulators have not completed revamping their guidelines.