Page 9 - May 23, 2024 Bulletin

aRTiCLeS

the other hand, it would also require operational and technical countries, Financial Crimes Enforcement Network Director
changes that would impose costs.” Andrea Gacki said. Speaking at an anti-money laundering
conference in New York City, Gacki said her agency received
The Fed is also proposing to expand the operating hours of NSS
to close 30 minutes earlier than Fedwire, which is open from nearly 119,000 SARs between April 1, 2022, and March 31 of
9 a.m. to 7 p.m. ET. The Fed is not considering expanding this year, for an average of 5,000 a month. Given the importance
operating hours for Fedwire. The changes would be implemented of SARs to law enforcement, she shared three best practices for
at least two years after the migration of Fedwire to the ISO increasing their utility for FinCEN.
20022 standard, scheduled for March 2025. The Fed is seeking First, at the beginning of each SAR, include a “bottom-line,
public comment on the proposal, with a deadline of 60 days after upfront” paragraph that identifies and explains why the reported
publication in the Federal Register. activity is suspicious, Gacki said. Second, include a citation or
clear explanation of any external information that triggered the
Read more: https://www.federalreserve.gov/newsevents/
pressreleases/bcreg20240503a.htm determination that the activity was suspicious, such as news
reports. Third, identify any links to foreign countries, including
Agencies Release Third-Party IP addresses. Such links provide FinCEN the opportunity to
collaborate with its counterparts in other countries, she said.
Risk Management Guide for Gacki also discussed FinCEN’s collection of beneficial ownership
Community Banks information, as required by the Corporate Transparency Act.
She said the agency has received more than 1.7 million reports
The Federal Reserve, FDIC and OCC have released a new guide since the reporting requirement went into effect on Jan. 1. She
to help community banks develop and manage third-party risk also noted that the agency is continuing its phased approach to
management practices. Among other things, the guide states providing BOI access, with financial institutions scheduled to
that engaging a third party does not diminish or remove a bank’s receive access in spring 2025.
responsibility to operate in a safe and sound manner, or to
comply with legal and regulatory requirements, just as if the bank Read more: https://www.fincen.gov/news/speeches/prepared-
were to perform the service or activity itself. remarks-fincen-director-andrea-gacki-during-sifma-aml-conference
“A community bank may engage an external party to conduct Housing Agencies Release
aspects of its third-party risk management,” the guide states.
“However, the bank cannot abrogate its responsibility to employ New Requirements to Reduce
effective risk-management practices, including when using a third Appraisal Bias
party to conduct third-party risk management on behalf of the
bank.” The Federal Housing Administration and Federal Housing
Finance Agency have announced new policies that will allow
The guide provides potential considerations, resources and
examples through each stage of the third-party risk-management borrowers to challenge property appraisals if they believe the
life cycle. It is not a checklist and does not prescribe specific appraisals were inaccurate or biased.
risk-management practices or establish any safe harbors for FHA’s new requirement for lenders participating in its single-
compliance with laws or regulations, the agencies said. It also is family mortgage program will enable borrowers to request a
not a substitute for the existing interagency guidance on third- re-assessment if they believe bias was involved. At the same time,
party relationship risk management. FHFA’s new reconsideration of value, or ROV, policies at Fannie
Mae and Freddie Mac will let borrowers request that an appraiser
Download the guide: https://www.federalreserve.gov/publications/
files/third-party-risk-management-guide-20240503.pdf re-assess the appraised value of a property due to potential
appraisal reporting deficiencies or inappropriate selection of
View the guidance, : https://www.occ.gov/news-issuances/ comparable properties. The policies will take effect later this year.
bulletins/2023/bulletin-2023-17.html
In 2023, FHFA and the Department of Housing and Urban
FinCEN Director Offers Tips for Development, which oversees FHA, established a working group
to develop consistent ROV standards. Among other things, the
Filing Suspicious Activity Reports FHA policy will require lenders to disclose to borrowers that they
may request an ROV with instructions that explain the process,
Financial institutions can improve the value of their suspicious including what information will be required from a borrower and
activity reports for law enforcement by taking steps such as the expected ROV processing times. Also, underwriters should be
providing citations and identifying known ties to foreign
trained to identify and remedy appraisal deficiencies, including

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