In The News

Credit unions have robust anti-money laundering practices in place

The B.C. government recently announced plans to further investigate potential money laundering practices taking place in British Columbia.

B.C. credit unions have robust anti-money laundering (AML) practices in place. In fact, all credit unions in Canada are required to adhere to strict regulations from the federal government that combat potential money laundering via financial institutions. Some of the AML measures credit unions have in place are:

  • AML Compliance Framework: developing, implementing and maintaining documented policies, processes, and procedures to ensure compliance with the regulations.
  • Know Your Client/Member (KYC/KYM): obtaining information from every new client/member to validate their identity and create a baseline of information. Data collected via KYC/KYM enables staff to recognize unusual or suspicious activity, which triggers enhanced due diligence (EDD) to obtain additional information for early detection of potential money laundering.
  • Risk Assessments: includes reviewing new and existing clients to determine the risk of money laundering in the context of the information provided, EDD, any transaction history, products/services and delivery channels, and the credit union’s AML framework.
  • Ongoing Monitoring: monitoring client transactions based on risk assessments.
  • FINTRAC Reporting: reporting large cash transactions and international wire transfers (equivalent to $10K CAD or more) and suspicious transactions to the federal regulator, FINTRAC (Financial Transactions and Reports Analysis Centre of Canada).
  • Training: ongoing AML training for employees in relevant roles, both when beginning employment and thereafter at least once per year.

Central 1’s Compliance Solutions team provides a full-service offering to credit unions to meet their AML requirements including: FINTRAC reporting, member monitoring and compliance documentation. We also have a strong rapport with regulators and other industry experts and stay updated on changing industry regulations.

In addition to wire screening, ongoing monitoring and enhanced due diligence, we further support credit unions with education and training. At least twice a year, Central 1 hosts AML conferences where we partner with industry experts (CRA, FINTRAC, AML legal experts, auditors, accountants) and AML vendors. We also provide training to our employees who are client-facing as well as to credit unions directly.

Central 1 also plays an active role in Payments Canada’s modernization program, which will eventually increase the scope of data available when funds are transferred between financial institutions, and provide additional capability to monitor for potentially suspicious transactions.

We take money laundering and related criminal activity very seriously and look forward to supporting the Province of B.C.’s important work where possible.