House Adds AML Provisions to Defense Bill

With a bipartisan majority of 336 to 71, the House on July 20 voted to add anti-money laundering (AML) provisions to the 2021 National Defense Authorization Act (NDAA).
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Financial trade groups had urged House Armed Services Committee leaders to include key anti-money laundering provisions in NDAA. The provisions would direct the Financial Crimes Enforcement Network to establish and maintain a registry of beneficial ownership information and also modernize Treasury authorities and certain anti-money laundering requirements.

The groups noted that these provisions will “assist in preventing money laundering, human trafficking, drug smuggling, terrorism financing, fraud and other illicit activity.”

The House still needs to vote on passage of NDAA, as amended.


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Phishing Attack Targets CU AML Officers

Krebs on Security is reporting that on January 30 a highly targeted, malware-laced phishing campaign landed in the inboxes of anti-money laundering (AML) officers at multiple credit unions.

The USA Patriot Act requires all financial institutions to appoint at least two Bank Secrecy Act (BSA) contacts responsible for reporting suspicious financial transactions that may be associated with money laundering.

These BSA contacts at credit unions are registered with the National Credit Union Administration (NCUA). This information is not publicly available.

Given the targeted nature of the spear phishing attack, some within the credit union industry speculated that NCUA may have been compromised.

However, NCUA denied the allegation. NCUA in a February 8 press release stated:

Upon learning of the recent spear phishing campaign targeting Bank Secrecy Act officers at credit unions, the NCUA conducted a comprehensive review of its security logs and alerts. This review is completed, and it did not find any indication that information was compromised.

It appears that the spear phishing campaign has spread beyond credit unions to other financial institutions.

This does raise the question of how did these phishers obtain this non-public information about BSA officers?

Employees Raise Concerns About PenFed's AML Program

The Wall Street Journal is reporting that employees at Pentagon Federal Credit Union (McLean, VA) reported to executives and regulators concerns about the credit union's anti-money laundering (AML) program.

"The concerns raised about Pentagon Federal Credit Union in 2016 and 2017 included understaffing, gaps in reporting of potentially suspicious transactions to the government, insufficient monitoring of wire transfers, a lack of anti-money-laundering training for senior leaders and inadequate scrutiny of potentially high-risk customers."

However, information obtained by the Wall Street Journal does not provide any evidence of money laundering by the credit union's members.

Pentagon Federal Credit Union (PenFed) told the Wall Street Journal that the allegations were false; but the credit union has made changes to its AML program, including reorganizing management, hiring more staff, adopting new policies and investing in suspicious-activity detection technology.

The article also states that PenFed entered into a document of resolution with the National Credit Union Administration to bolster its AML program.

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