How often must credit unions review granted exemptions for both Phase I and Phase II?

The requirement for credit unions to review granted exemptions for both Phase I and Phase II annually is based on compliance with the Bank Secrecy Act (BSA) regulations. Annual reviews ensure that the exemptions remain valid and appropriate based on the current risk profile of the customer or product.

This timeframe allows credit unions to continuously assess changes in customer behavior, regulatory updates, and any other relevant factors that may affect the status of the exemptions. Regular annual reviews could also help identify any potential compliance gaps or risks that may arise over time, ensuring the institution remains compliant with the BSA requirements.

The frequency of annual reviews aligns with the regulatory expectation for ongoing monitoring, which is essential in maintaining an effective anti-money laundering (AML) program and ensuring that the credit union adheres to best practices in risk management.