Inter-American Federal Credit Union

Brooklyn, NY 2017--2022 Community Banks / Credit Unions

NCUA Bsa Aml Program Failure Suspicious Activity Reporting Failure Ofac Compliance Failure Accounting Recordkeeping Failure

Penalty

Outcome

NCUA issued a cease and desist order against Inter-American Federal Credit Union for BSA/AML compliance failures including absence of a suspicious activity monitoring system, deficient OFAC procedures, accounting imbalances, and failure to conduct member account verification going back to 2017.

Details

Inter-American Federal Credit Union — BSA/AML and OFAC Compliance Failures (2017–2022)

Outcome: NCUA issued a consent-based cease and desist order (Docket 22-0112-ER) requiring Inter-American Federal Credit Union to implement a suspicious activity monitoring system, file all overdue SARs, establish OFAC compliance procedures, reconcile accounting imbalances dating to 2017, and complete an independent CPA audit covering more than four years.

Inter-American Federal Credit Union, located in Brooklyn, New York, was the subject of a 2022 NCUA administrative cease and desist order. The order addressed a cluster of interlocking compliance failures that had been allowed to persist for multiple years across BSA/AML monitoring, OFAC compliance, accounting controls, and member account verification.

The most serious finding was the absence of any automated suspicious activity monitoring system — the credit union had failed to implement technology or manual processes to identify transactions that might require Suspicious Activity Report filings under 31 C.F.R. § 1020.320. The order required the credit union to implement such a system and file all required SARs by June 30, 2022.

The OFAC compliance failure was equally fundamental: the credit union lacked written procedures for screening transactions and members against the OFAC Specially Designated Nationals and Blocked Persons list, a baseline requirement for any federally insured financial institution. The order required written OFAC procedures and transaction screening to be in place by June 30, 2022.

The accounting failures were documented going back to August 31, 2017. The NCUA required an independent CPA audit covering the period August 31, 2017 through March 31, 2022 — a nearly five-year period — to be completed and presented to the board by July 31, 2022. Monthly account reconciliations were required to be completed by the 20th of each subsequent month. Dormant accounts were required to be escheated to New York State.

The credit union consented to the order, waiving its right to an administrative hearing and judicial review.

Primary Source: NCUA Administrative Order — Inter-American Federal Credit Union

How Crucible Prevents This

Automated reconciliation controls with monthly sign-off requirements would have caught the accounting imbalances that persisted from at least 2017. A BSA/AML compliance checklist enforced at board level with documented evidence of SAR filing activity would have identified the absence of a suspicious activity monitoring system. OFAC screening integration at account opening and transaction processing is a basic control that a compliance workflow system would enforce automatically.

Source: Administrative Order: In the Matter of Inter-American Federal Credit Union — NCUA Docket 22-0112-ER

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