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Burke & Herbert Bank ordered to improve money laundering oversight

By WTOP Staff

Burke & Herbert Bank & Trust must develop new procedures to guard against money laundering under the terms of a consent agreement with the Federal Deposit Insurance Corporation.

The Alexandria-based bank agreed to do so in a 14-page order dated Aug. 21 and released publicly Sept. 26, just as copies of a two-page letter explaining the regulatory action were arriving in shareholders’ mailboxes.

“Following a constructive process of negotiation with the FDIC, the bank has committed to take specific steps to strengthen and enhance its Bank Secrecy Act program,” says the letter from bank CEO Hunt Burke and President and COO Scott McSween. “Whereas we already were engaged intently in such work, we felt it appropriate to agree to this action by the FDIC in order to remain focused on the future of the bank.”

It’s the first time the FDIC has taken such action against the 162-year-old bank, Burke and McSween told me during an interview Sept. 26. They suggested the action comes amid stepped-up FDIC enforcement of the Bank Secrecy Act, which was passed by Congress in 1970. Among other requirements, the law requires banks to report on cash transactions of $10,000 or more.

An FDIC spokesman said the agency has changed its oversight of the law.

There are no civil fines or restrictions on bank activity in the order, which states the bank is not admitting to any unsafe or unsound banking practices or violation of laws.

Burke and McSween said the financial underpinnings and performance of the bank are as strong as ever. They also suggested the enforcement might have resulted from the size of the bank, now about $2.5 billion in assets, or new FDIC personnel conducting a routine examination, which first flagged the issues last summer.

Whether the bank has been exposed to any money laundering remains to be seen. The order requires a review of “all high-risk accounts and high-risk transaction activity” dating back to June 30, 2011. That could include international transactions, which are more common in Greater Washington than many other parts of the nation.

As required by the order, the bank has named its first-ever BSA officer. Amanda Pierson was hired in July after holding a similar post at WashingtonFirst since March 2012, according to her LinkedIn profile. She will report to Jennifer Schmidt, who was hired in June as chief compliance officer as the bank reshuffled some other duties and positions.

Burke & Herbert also is undergoing several technical upgrades to monitor BSA compliance. “Some of the processes we had in place but were manual and required a lot of explaining [to the FDIC bank examiners],” Burke said.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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