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Can you summarize Risks Associated with Money Laundering and Terrorist Financing > Non-Bank Financial Institutions (2014)?
Risks Associated with Money Laundering and Terrorist Financing > Non-Bank Financial Institutions (2014)
Short Summary
This document focuses on assessing the adequacy of a bank’s systems to manage the risks associated with accounts of nonbank financial institutions (NBFI). NBFIs are broadly defined as institutions other than banks that offer financial services. The document highlights that banks are not expected to serve as the de facto regulator of any NBFI industry or individual NBFI customer. It emphasizes the need for banks to develop policies, procedures, and processes to identify and assess the potential risks posed by NBFI relationships. The document also emphasizes the importance of conducting due diligence on NBFI relationships, integrating NBFI relationships into the bank’s suspicious activity monitoring and reporting systems, and assessing the risks posed by NBFI customers based on factors such as the types of products and services offered, locations and markets served, anticipated account activity, and purpose of the account. The document also provides guidance on providing banking services to money services businesses (MSBs) and outlines the expectations for risk assessment, due diligence, and risk mitigation for MSB accounts.
Whom does it apply to?
Banks that maintain account relationships with NBFIs
What does it govern?
Risks associated with accounts of nonbank financial institutions (NBFI)
What are exemptions?
Banks are not expected to serve as the de facto regulator of any NBFI industry or individual NBFI customer
What are the Penalties?
No specific penalties mentioned
Jurisdiction
U.S. Federal Government