CU Trades: NCUA is Too Picky in Anti-Money Laundering Exams


Read more at the Washington Credit Union Daily

National Credit Union Administration examiners are too picky in their Anti-Money Laundering/Bank Secrecy Act enforcement and are citing financial institutions for small technical violations, credit union trade groups have told the agency.

“Many of our members have indicated that prudential examiners are too heavily focused on auditing absolute compliance with certain technicalities,” Ann Kossachev, director of regulatory affairs at the National Association of Federally-Insured Credit Unions, said in a letter to the NCUA.

Luke Martone, senior director of advocacy and counsel at the Credit Union National Association, had a similar complaint. “Intentional non-compliance or a pattern of negligence with the essential and substantive requirements should be subject to zero tolerance, but the occasional clerical error, such as failing to check a box on a complex form, should be afforded more leniency,” he said.

He added that an error such as recording a Post Office Box as an address can lead the agency to issue a document showing the credit union is out of compliance with the law.

The two trade group officials outlined their views in letters to the agency as part of the NCUA’s annual regulatory review process. Each year, the NCUA reviews a third of its regulations and solicits public comments on whether they need to be updated. The agency’s money laundering rules are on the list this year.

Martone said that federal law requires credit unions to have an effective process for evaluating whether a Suspicious Activity Report should be filed on a particular transaction. However, he added that the actual decision about whether to file a report on an individual transaction is “inherently subjective” and as long as a credit union follows its policy, it should not be sanctioned for that decision.

Kossachev said that the NCUA should coordinate with FinCEN in order to ensure that sensible regulation and exams are tailored to actual risks.


  • David Baumann

    David Baumann established and edited the Washington Credit Union Daily website before it was put on hiatus while he served as the editor of the regulatory and legislative blog at CUCollaborate. Before starting Washington Credit Union Daily, David was the Washington correspondent for the Credit Union Times. A veteran Washington reporter, he has spent his career writing and editing for many of the capital’s leading publications, including CongressDaily, National Journal magazine and Congressional Quarterly Weekly. He was part of a team that won a 2005 National Headliner Award for a special issue of National Journal on “The State of Congress.” He holds a B.A. in political science from The George Washington University and an M.A. in journalism from Indiana University.

  • Marvin Johnson#1

    August 31, 2021

    It would be interesting to know how the stringency of NCUAs AML/BSA enforcement breaks down by state or region. I’m curious whether it’s across the board or variable based on the examiner or area.


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