SPST 0087 (2014) -revised

SPST 0087 (2014) -revised.doc

Procedures for Monitoring Bank Secrecy Act Compliance

OMB: 3064-0087

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SUPPORTING STATEMENT

PROCEDURES FOR MONITORING BANK SECRECY ACT COMPLIANCE

(OMB No.3064‑0087)



INTRODUCTION


The FDIC is requesting a renewal of the currently approved collection of information captioned above without any change in the substance or in the method of collection. The collection of information requirements is contained in § 326.8(b)(1) and (c) of FDIC's regulation 12 C.F.R. 326.


A. JUSTIFICATION


1. Circumstances that make the collection necessary


As required by Section 8(s) of the Federal Deposit Insurance Act (12 U.S.C. § 1818(s)), the FDIC’s 12 C.F.R. § 326.8(b) (1) and (c), requires all insured nonmember banks to establish and maintain procedures designed to assure and monitor their compliance with the requirements of the Bank Secrecy Act (31 U.S.C. 5311 et seq.) and the Treasury’s implementing regulations at 31 C.F.R. Chapter X.


An institution's compliance program must be reduced to writing, approved by the institution's board of directors and noted in the minutes of the board meeting. The compliance program must consist of a system of internal controls to assure ongoing compliance and provide for independent testing for compliance to be conducted by bank personnel or by an outside party. The bank must also designate an individual or individuals responsible for compliance, and provide for the training of appropriate personnel. (The “Customer Identification Program” information collection required by § 326.8(b) (2) is approved under OMB PRA Control No. 1506-0026.)


2. Use of the information of information collected


The information is reviewed by the FDIC during the course of bank examinations to verify compliance with statutory and regulatory requirements. The agency report of examination will describe any problem with the compliance program, including the procedures followed by an insured bank.


3. Consideration of the use of improved information technology


Banks may use any appropriate technology to prepare and maintain their written procedures. However, the applied technology must not impede the examination process.


4. Efforts to identify duplication


There is no duplication in the requirements to prepare and maintain written plans for Bank Secrecy Act compliance. Each Federal banking agency requires the banks it supervises to prepare written procedures as required by the Bank Secrecy Act (31 U.S.C. 5311 et seq.) and the Treasury’s implementing regulations at 31 C.F.R. Chapter X


5. Methods used to minimize burden if the collection has a significant impact on a substantial number of small entities


All banks are subject to the same requirement to prepare and maintain written procedures as part of this program to assure and monitor compliance with the Bank Secrecy Act (31 U.S.C. 5311 et seq.) and the Treasury’s implementing regulations at 31 C.F.R. Chapter X. The burden in preparing and maintaining written procedure is likely proportionate to the size and complexity of the bank’s operations.


6. Consequences to the Federal program if the collection were conducted less

frequently


As a sound practice, a bank’s board of directors should update the written procedures, at least annually, to incorporate procedural changes and to ensure the program’s effectiveness.


7. Special circumstances that would cause an information collection to be conducted in a manner inconsistent with 5 CFR Part 1320


There are no special circumstances that would cause an information collection to be

conducted in a manner inconsistent with 5 CFR Part 1320.


8. Efforts to consult with persons outside the agency


The FDIC published a Federal Register notice seeking public comment on this collection for a 60-day period on December 9, 2013 (78 FR 73862). No comments were received.


  1. Payment or gift to respondents


None.


10. Any assurance of confidentiality


This collection of information is not confidential.


11. Justification for questions of a sensitive nature


This collection does not contain information of a private and sensitive nature.



12. Estimates of Hour Burden and Annualized Cost


The FDIC estimates that the annual recordkeeping burden of approximately 4,316 FDIC regulated institutions will vary, depending on the size, complexity, and type of bank. The burden is calculated as follows:



Cite

and

Burden Type

Information Collection Requirements

in

12 CFR Part 326.8(b)

Number

of

Recordkeepers


Average

Hours Per

Response

Estimated

Burden

Hours

12 CFR 326

Recordkeeping

Subpart B – Procedures for Monitoring Bank Secrecy Act Compliance


§ Part 326.8(b)(1) - Bank Secrecy Act complianceEach bank shall develop and provide for the continued administration of a program reasonably designed to assure and monitor compliance with recordkeeping and reporting requirements set forth in subchapter II of chapter 53 of title 31, United States Code, and the implementing regulations issued by the Department of Treasury at 31 C.F.R. Chapter X. The compliance program shall be written, approved by the bank's board of directors, and noted in the minutes.

4,316 recordkeepers



Small Banks: 3,600

< $0.5 billion

Mid-Size Banks: 689

$0.5 - $10 billion

Large Banks: 27

> $10 billion




35 hours


250 hours


450 hours




126,000hours


172,250 hours


12,150 hours

Total recordkeeping


4,316 recordkeepers



310,400 hours


Avg. Hours / Recordkeepers= 71.9184 hours









Cost of Hour Burden to Respondents:


Executive Assistant ($20/hour): 70% x 310,400 hours @ $20 = $ 4,345,600

Compliance Officer ($40/hour): 29% x 310,400 hours @ $40 = $ 3,600,640

Board of Director ($80/ hour): 1% x 310,400 hours @ $80 = $ 248,320

Total $ 8,194,560




The annual cost per recordkeeper: $1,899 ($8,194,560 / 4,316)




  1. Estimate of total annual costs to respondents (excluding cost of hour burden in Item #12)


None.


  1. Estimate of annualized costs to the Federal government


There are no costs to the Federal government related to this information collection. The information is reviewed as part of the examination process.


15. Reasons for change in burden


The decrease in burden of 18,360 hours is an adjustment that reflects a decrease of 565 in the number of respondents.


16. Information regarding collections whose results are to be published for statistical use


The FDIC does not intend to publish this collection of information for statistical use.


17. Reasons for not displaying OMB approval expiration date


No exceptions are requested.

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File Typeapplication/msword
File TitleSUPPORTING STATEMENT
AuthorFDIC
Last Modified ByGregorie, Leneta G.
File Modified2014-01-27
File Created2014-01-24

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