Board of Governors of the Federal Reserve System

Federal Deposit Insurance Corporation

Financial Crimes Enforcement Network

National Credit Union Administration

Office of the Comptroller of the Currency

Interagency Statement on Sharing Bank Secrecy Act Resources

October 3, 2018

Page 1 of 4

Introduction

The Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance 

Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the 

Comptroller of the Currency (OCC), and the U.S. Department of Treasury’s Financial Crimes 

Enforcement Network (FinCEN) (collectively, the Agencies), are publishing this statement to

address instances in which banks [Fotne1

- Under the BSA the term “bank” is defined in 31 CFR 1010.100(d) and includes each agent, agency, branch or

office within the United States of banks, savings associations, credit unions, and foreign banks. EndofFte 1.]

may decide to enter into collaborative arrangements to share

resources to manage their Bank Secrecy Act (BSA) and anti-money laundering (AML) 

obligations more efficiently and effectively. Collaborative arrangements as described in this 

statement generally are most suitable for banks with a community focus, less complex 

operations, and lower-risk profiles for money laundering or terrorist financing. The risk profile 

is bank-specific, and should be based on a risk assessment that properly considers all risk areas, 

including products, services, customers, entities, and geographic locations. [Fotne2

- See Federal Financial Institutions Examination Council (FFIEQ) Bank Secrecy Act/Anti-Money Laundering

Examination Manual (2014), at https://bsaaml.ffiec.gov/pages manual/manual online.htm EndofFte 2.]

Collaborative arrangements involve two or more banks with the objective of participating in a 

common activity or pooling resources to achieve a common goal. Banks use collaborative 

arrangements to pool human, technology, or other resources to reduce costs, increase operational 

efficiencies, and leverage specialized expertise.

Notably, this interagency statement does not apply to collaborative arrangements or consortia 

formed for the purpose of sharing information under Section 314(b) of the USA PATRIOT Act. 

Further, banks that form collaborative arrangements as described in this interagency statement

are not an association for purposes of Section 314(b) of the USA PATRIOT Act. [Fotne3

- See Voluntary Information Sharing Among Financial Institutions, 31 CFR 1010.540. EndofFte 3.]

Banks should

contact FinCEN for additional information concerning the 314(b) program and requirements. 

All banks are required to establish and maintain procedures reasonably designed to ensure

compliance with the BSA and to develop and implement BSA/AML programs. [Fotne4

- See 31 U.S.C. 5311 etseq. 31 U.S.C. 5318(h)(1), and the federal banking agencies’ implementing BSA/AML

compliance program regulations: 12 CFR 208.63, 12 CFR 211.5(m), and 12 CFR 211.24(j) (FRB); 12 CFR 326.8

(FDIC); 12 CFR 748.2 (NCUA); and 12 CFR 21.21 (OCC). EndofFte 4.]

The BSA/AML

compliance program must include the following: 1) a system of internal controls to ensure 

ongoing compliance; 2) independent testing of BSA/AML compliance; 3) designating an
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individual or individuals responsible for managing BSA compliance (BSA compliance officer);

and 4) training for appropriate personnel. [Fotne5

- See 31 CFR 1020.210 and 1010.230 - Under the Customer Due Diligence rule, banks are required to develop and

implement appropriate risk-based procedures for conducting ongoing customer due diligence, to include, but not be

limited to (i) understanding the nature and purpose of customer relationships for the purpose of developing a

customer risk profile; and (ii) conducting ongoing monitoring to identify and report suspicious transactions and, on a

risk basis, to maintain and update customer information (including beneficial owners of legal entity customers). EndofFte 5.]

A bank is expected to have a BSA/AML compliance

program commensurate with its respective risk profile.

Benefits of Sharing a Resource

The cost of meeting BSA requirements and effectively managing the risk that illicit finance 

poses to the broader U.S. financial system may be reduced through sharing employees or other 

resources in a collaborative arrangement with one or more other banks. These arrangements may 

also provide access to specialized expertise that may otherwise be challenging to acquire without 

the collaboration. The following examples describe situations in which the use of shared human, 

technology or other resources in a collaborative arrangement may be beneficial for banks. These 

examples are not intended to be exhaustive.

Internal Controls Example

Banks are required to provide for a system of internal controls to assure ongoing compliance 

with the BSA. A collaborative arrangement may be entered into by two or more banks to share 

resources between the respective banks to conduct internal control functions. Some examples of 

functions that may be conducted utilizing shared resources include: 1) reviewing, updating, and 

drafting BSA/AML policies and procedures; 2) reviewing and developing risk-based customer 

identification and account monitoring processes; and 3) tailoring monitoring systems and reports 

for the risks posed.

Independent Testing Example

Banks are required to provide for independent testing for compliance. That testing may be 

conducted by an outside party or bank personnel. Such testing should provide an evaluation of 

the adequacy and effectiveness of the bank’s BSA/AML compliance program.

Some banks may have personnel that perform multiple job functions, making it difficult to 

identify an employee within the bank to conduct an independent test of the BSA/AML 

compliance program. Personnel at one bank may be utilized to conduct the BSA/AML 

independent test at another bank within a collaborative arrangement. The shared resource may, 

for example, be utilized in the scoping, planning, and performance of the BSA/AML compliance 

program independent test with appropriate safeguards in place to ensure the confidentiality of 

sensitive business information. The banks involved in the collaborative arrangement need to 

ensure that the shared resource conducting the BSA/AML independent testing is qualified and 

not involved in other BSA/AML functions at the bank being reviewed, such as training or 

developing policies and procedures that may present a conflict of interest or lack of 

independence.
Page 3 of 4

BSA/AML Training Example

Banks must ensure that appropriate personnel are trained in BSA regulatory requirements and in 

internal BSA/AML policies, procedures, and processes.

It may be challenging to acquire personnel with BSA/AML expertise in some communities. It 

may also be cost prohibitive to attract a qualified outside BSA/AML trainer. A collaborative 

arrangement between two or more banks may provide the latitude to hire a qualified instructor to 

conduct the BSA/AML training, allowing the bank to share the cost. Examples of basic 

BSA/AML training topics that may be covered by shared resources include: alert analysis and 

investigation techniques, alert trends and money laundering methods, and regulatory updates.

Other Considerations

The bank’s board of directors must designate a qualified individual or individuals to serve as the

BSA compliance officer. [Fotne6

- See 12 CFR 208.63, 12 CFR 211.5(m), and 12 CFR 211.24(j) (FRB); 12 CFR 326.8 (FDIC); 12 CFR 748.2

(NCUA); and 12 CFR 21.21 (OCC). EndofFte 6.]

The sharing of a BSA officer among banks could be challenging due

to the confidential nature of suspicious activity reports filed and the ability of the BSA officer to 

effectively coordinate and monitor each bank’s day-to-day BSA/AML compliance. In addition, 

the sharing of a BSA officer may create challenges with effective communication between the 

BSA officer and each bank’s board of directors and senior management. Accordingly, it may not 

be appropriate for banks to enter into a collaborative arrangement to share a BSA officer. [Fotne7

- Although it may not generally be appropriate to share a BSA officer through a collaborative arrangement, it may

be more appropriate between affiliated banks. EndofFte 7.]

Risk Considerations and Mitigation

The use of collaborative arrangements to manage BSA/AML obligations requires careful 

consideration regarding the type of collaboration in relation to the bank’s risk profile, adequate 

documentation, consideration of legal restrictions, and the establishment of appropriate oversight 

mechanisms; and should be consistent with sound principles of corporate governance. For 

example, a bank’s board of directors should provide for appropriate oversight of BSA/AML 

collaborative arrangements in advance. As is standard, a collaborative arrangement should be 

supported by a contractual agreement between the banks, with the performance reviewed by 

management and evaluated on a periodic basis. Banks should refer to their respective regulator’s 

existing guidance regarding third-party relationships.

A collaborative arrangement for sharing employees or other resources to manage BSA/AML 

obligations is similar to using dual-employees. Guidance in this area could be relevant to

contractual agreements between banks sharing BSA/AML resources. [Fotne8

- See e.g., FDIC’s Risk Management Manual o f Examination Policies, Chapter 4.3 Related Organizations, Dual

Employees Section at https://www.fdic.gov/regulations/safety/manual/section4-3.pdf. EndofFte 8.]

Banks must also comply

with all applicable legal restrictions, including limitations on the disclosure of confidential 

supervisory information, confidential financial and business information, individual customer
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data, and trade secrets, as well as restrictions governing collaborative arrangements among 

competitors generally, such as rules designed to limit conflicts of interest.

As is usual and customary when a bank enters into an arrangement with a third-party, a 

collaborative arrangement should be appropriately documented to define the nature and type of 

resources to be shared, define each institution’s rights and responsibilities, establish procedures 

for protecting customer data and confidential information, and develop a framework to manage 

risks associated with the sharing of resources. Reasonable systems should be established to 

ensure that bank management adequately oversees the activities of shared resources. Banks 

should devote sufficient resources for monitoring services performed under the collaborative 

arrangement. Periodic reports related to BSA/AML collaborative arrangements should be 

provided to senior management and reported to the board of directors as appropriate in 

conjunction with their regular oversight of bank activities.

It is important that collaborative arrangements be designed and implemented in accordance with 

the bank’s risk profile for money laundering and terrorist financing. Ultimately, each bank is 

responsible for ensuring compliance with BSA requirements. Sharing resources in no way 

relieves a bank of this responsibility. Nothing in this interagency statement alters a bank’s 

existing legal and regulatory requirements.

Conclusion

Banks may benefit from using shared resources to manage certain BSA/AML obligations more 

efficiently and effectively. However, banks should approach the establishment of collaborative 

arrangements like other business decisions, with due diligence and thorough consideration of the 

risks and benefits. Banks are encouraged to contact their primary federal regulator regarding 

sharing BSA resources, and should refer to other relevant guidance. [Fotne 9

- See e.g., OCC’s “An Opportunity for Community Banks: Working Together Collaborativelv” (January 13, 2015),

at https://www.occ.gov /publications/publications-bv-type/other-publications-reports/pub-other-communitv-banksworking-collaboratelv.PDF. EndofFte 9.]