In this issue

Featured insight

10 steps to implementing an effective third-party risk program
Modern banks and financial services companies depend on a vast network of third-party relationships that extend beyond traditional product and service providers to include dealers, brokers, joint ventures, affiliates and many others. The top 10 U.S. banks each average between 20,000 and 50,000 third-party relationships. This complex web of relationships can sometimes have unexpected consequences and needs to be monitored and managed correctly. This checklist details how banks and financial services companies can streamline the implementation and optimization of an effective third-party risk program.
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Trump unlikely to curb AML rules; new, “fairly loose” cyber standards seen
The administration of President Donald Trump is unlikely to ease U.S. anti-money laundering regulations, according to former New York Mayor Rudy Giuliani, who said the administration is also likely to issue cybersecurity regulations, but they would probably be "fairly loose" in their impact on businesses. Trump last month signed an executive order to place "regulatory reform" task forces and officers within federal agencies in what may be the most far-reaching effort to pare back U.S. red tape in recent decades. He previously vowed a sweeping cut in U.S. regulations and ordered agencies to repeal two rules for every new one adopted. It appears, however, that the primary U.S. anti-money laundering law, the Bank Secrecy Act, is not targeted.
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Best practices

New CSBS tool for BSA/AML aims to enhance risk assessment
As financial institutions face increased scrutiny on assessing Bank Secrecy Act/Anti-Money Laundering (BSA/AML) risk, there is now another tool to help document that risk. The Conference of State Bank Supervisors, along with state financial regulators, recently announced the release of the BSA/AML Self-Assessment Tool, which is aimed at assisting institutions to better identify and communicate BSA/AML risk.
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Spotlight

Why customer and third-party due diligence must evolve
More companies are realizing the need to go beyond a tick-box approach to customer and third-party due diligence. In the last few years we have seen some of the highest fines levied on financial institutions and multinationals because they did not follow proper customer due diligence measures. Anti-money laundering regulations (such as the EU Money Laundering Directives and the USA PATRIOT Act) as well as anticorruption legislation (such as the US Foreign Corrupt Practices Act) require organizations to identify customers and third parties who may pose a heightened risk, and to conduct further Enhanced Due Diligence (EDD) research on these entities to better assess the risks they constitute. Today, companies (and in some instances senior management) are increasingly held accountable for transactions that facilitate or allow money laundering, corruption or fraud to occur.
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Regulations to watch

Rule changes for student loan servicers
On March 16, the Department of Education issued a memorandum canceling an Obama-era ban on the collection of fees against borrowers who defaulted on their student loans. The ban, originally imposed in July of 2015, prevented guarantee agencies that collected debt on the Federal Family Education Loan (FFEL) Program from charging collections fees to borrowers who defaulted on their student loan payments, so long as the borrower entered the government’s loan repayment agreement within 60 days of default, and remained current on their payments in the program.
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