FFIEC BSA/AML Exam Manual Updates—Implications For Banks

The Federal Financial Institutions Examination Council (FFIEC) released the fifth phase of updates to the FFIEC Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual (the Manual) on August 2, 2023. While the Manual is not intended to serve as guidance for the banking industry, it provides valuable insights into the federal banking agencies' examination processes and how they evaluate the effectiveness of a bank's BSA/AML compliance program. The most significant changes and updates in this current phase were made to the section on Due Diligence Programs for Correspondent Accounts for Foreign Financial Institutions (the Correspondent Banking Section). While these updates largely reiterate regulatory requirements, the manner in which those requirements are framed by examiners largely drives the outcome of BSA/AML exams. Beyond framing, the revisions also include critical new examples of risk factors and controls that may be appropriate to oversight of