Money Laundering, Terrorism and Financial Institutions - USA Patriot Act Monitor

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1/24/2005 USA PATRIOT Act Monitor News Release: Post-Employment Restrictions on Federal Bank Examiners

An employee of a federal banking agency or a Federal Reserve bank who served two or more months during the final 12 months of his or her employment with the federal agency as a senior examiner of a depository institution or depository institution holding company “with continuing, broad responsibility for the examination (or inspection) of an institution or holding company will be subject to a new penalty provision if he or she takes a position with the supervised institution or its holding company. New 12 U.S.C. 1820(k), added by the Intelligence Reform and Terrorism Prevention Act of 2004, applies if such an employee accepts compensation as an employee, officer, director, or consultant from the supervised institution (or its holding company). The legislation may reflect Congressional reaction to the employment of a former examiner by the Riggs Bank, who influenced his former colleagues regarding examinations of the bank. Former examiners may be subject to an industry-wide order prohibiting "such person from further participation in the conduct of the affairs of the depository institution" for up to five years, and a civil money penalty up to $250,000. A waiver may be granted by a federal banking agency on a case by case basis. The new provision is effective with the date of enactment of the Intelligence Act, December 17, 2004.Other provisions of the Intelligence Act affecting financial institutions will be discussed in detail in the February issue of the Monitor, as well as being included in the checklists for banks, broker-dealers, and money services businesses, posted at http://www.civicresearchinstitute.com/moneylaundering.

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