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Contract analysis / board-presentation-bsa-aml-remediation-overview.pptx
board-presentation-bsa-aml-remediation-overview.pptx
High · 2
Medium · 1
Standard · 0
1. Executive Summary: The Consent Order and Its Implications
1. Executive Summary: The Consent Order and Its Implications
2. Belmont Ridge Bank — Institutional Overview and Current Posture
2. Belmont Ridge Bank — Institutional Overview and Current Posture
3. Key Findings: Five Core Deficiency Categories
3. Key Findings: Five Core Deficiency Categories
4. Regulatory History — Escalation from MRA to MRIA to Consent Order
4. Regulatory History — Escalation from MRA to MRIA to Consent Order
5. Remediation Action Plan: Five Workstreams
5. Remediation Action Plan: Five Workstreams
6. Timeline and Critical Milestones
6. Timeline and Critical Milestones
7. Budget and Financial Impact
7. Budget and Financial Impact
8. Engagement of Outside Counsel and Independent Consultant
8. Engagement of Outside Counsel and Independent Consultant
9. Technology Remediation: Vendor Strategy
9. Technology Remediation: Vendor Strategy
10. Board Governance Obligations and Compliance Committee
10. Board Governance Obligations and Compliance Committee
11. Regulatory Risk Assessment: FinCEN, OFAC, and DOJ Exposure
11. Regulatory Risk Assessment: FinCEN, OFAC, and DOJ Exposure
12. Shareholder and Disclosure Considerations
12. Shareholder and Disclosure Considerations
13. Immediate Action Items and Next Steps
High
⚑ Penalty / liquidated damages
13. Immediate Action Items and Next Steps [slide 3] Executive Summary OCC Consent Order No. OCC-2025-003 issued January 15, 2025, citing significant BSA/AML and OFAC sanctions compliance deficiencies Civil money penalty of $14.5 million assessed; payable by March 16, 2025 Five core deficiency categories identified: OFAC screening, SAR filing, CDD/EDD, transaction monitoring model validation, and Board oversight Compr
1. OFAC Sanctions Screening: Failed to screen 100% of BaaS channel transactions; ~12% of N
1. OFAC Sanctions Screening: Failed to screen 100% of BaaS channel transactions; ~12% of NovaPay wire and ACH transactions unscreened (~3.8M of 31.7M NovaPay transactions in CY 2023)
2. SAR Filing Deficiencies: Backlog of ~2,400 unreviewed suspicious activity alerts as of
2. SAR Filing Deficiencies: Backlog of ~2,400 unreviewed suspicious activity alerts as of September 2024; average SAR filing time of 78 days (vs. 30-day regulatory expectation)
3. CDD/EDD Failures: ~47,000 high-risk customer accounts (primarily fintech-onboarded) lac
3. CDD/EDD Failures: ~47,000 high-risk customer accounts (primarily fintech-onboarded) lacked adequate Customer Due Diligence or Enhanced Due Diligence documentation
4. Transaction Monitoring Model Validation: Veridian TMS v.8.3 not independently validated
4. Transaction Monitoring Model Validation: Veridian TMS v.8.3 not independently validated since March 2021 (>3 years); tuning parameters last updated October 2022
5. Board Oversight: No dedicated Compliance Committee; BSA/AML reporting to Board was quar
High
⚑ Penalty / liquidated damages
5. Board Oversight: No dedicated Compliance Committee; BSA/AML reporting to Board was quarterly only and lacked key metrics (SAR volumes, OFAC screening hit rates, BaaS partner risk ratings) [slide 6] Regulatory History — Escalation of Supervisory Findings (2022–2025) June 2022: OCC issues Matter Requiring Attention (MRA) regarding BSA/AML transaction monitoring deficiencies October 2022: Last tuning of Veridian TMS
1. Adopt Board Resolution by February 28, 2025: Acknowledge Consent Order; establish Compl
1. Adopt Board Resolution by February 28, 2025: Acknowledge Consent Order; establish Compliance Committee; authorize $42.5M remediation budget; direct full cooperation
2. Adopt Compliance Committee Charter and amended bylaws concurrently
2. Adopt Compliance Committee Charter and amended bylaws concurrently
3. Ensure CMP payment of $14.5 million by March 16, 2025 (wire to U.S. Treasury; accountin
3. Ensure CMP payment of $14.5 million by March 16, 2025 (wire to U.S. Treasury; accounting treatment coordinated by CFO Samantha Reeves)
4. Support Thornfield on-site assessment commencing March 1, 2025 — all departments to coo
4. Support Thornfield on-site assessment commencing March 1, 2025 — all departments to cooperate fully per Access & Cooperation Protocol
5. Prepare and file interim SAR backlog status report with OCC by March 31, 2025
5. Prepare and file interim SAR backlog status report with OCC by March 31, 2025
6. Execute Veridian MSA amendment for TMS v.10.0 upgrade; finalize Pinnacle managed servic
6. Execute Veridian MSA amendment for TMS v.10.0 upgrade; finalize Pinnacle managed services deployment
7. Initiate enterprise-wide BSA/AML and OFAC training program; schedule Board and senior m
7. Initiate enterprise-wide BSA/AML and OFAC training program; schedule Board and senior management training sessions
8. Schedule first Compliance Committee meeting for early March 2025
Medium
⚑ Confidentiality undertaking
8. Schedule first Compliance Committee meeting for early March 2025 [slide 23] Questions and Discussion Key contacts: • Philip Hartmann — Calderwood & Harkness LLP, Responsible Partner (1285 Avenue of the Americas, 40th Floor, New York, NY 10019) • Gregory Nardone — BRB General Counsel & Corporate Secretary • Patricia Langston — BRB Chief Compliance Officer • Thomas Ikeda — BSA Officer / AML Program Director Material