On October 5, 2016, the OCC issued risk management guidance to national banks, federal savings associations and federal branches and agencies regarding the periodic reevaluation of risks in connection with providing correspondent banking accounts for foreign banks. The guidance provides a collection of best practices for banks to consider when undertaking such periodic reevaluations and when determining whether to retain or terminate certain accounts. Such practices include, among others, communicating these decisions to bank senior management with consideration given to potential international financial inclusion impacts, considering mitigating information obtained from foreign financial institutions and ensuring a clear audit trail of the reasons and method used for account closure.
The guidance restates the OCC's supervisory expectation that banks assess risks associated with foreign correspondent banking as part of their on-going risk management and due diligence practices. As a general matter, decisions to retain or terminate banking relationships reside with the bank. The OCC does not direct banks to open, close or maintain individual accounts without regard to the risks presented by an individual customer or the bank's ability to manage the risk.
The OCC guidance is available at: https://occ.gov/news-issuances/bulletins/2016/bulletin-2016-32.html.
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