Why Reviewing and Updating Your AML/BSA Compliance Manual Every Year Isn’t Optional

When it comes to Money Services Businesses (MSBs), there are a few things that examiners almost always ask for first: your check cashing license, your FinCEN registration, and your AML/BSA compliance manual.

That manual is more than just a binder on a shelf; it’s the document that tells regulators exactly how you intend to comply with the law. It outlines your policies, your internal controls, and the steps you take to detect and prevent money laundering and other financial crimes. And yet, one of the most common findings during both federal and state examinations is that the manual is outdated.

The expectation from regulators is clear: your AML/BSA compliance manual must be reviewed and updated at least annually, and whenever a material change occurs in your business operations or risk profile. Anything less can put you on the wrong side of both federal and state regulators.

The Regulatory Foundation

Federal law under 31 CFR § 1022.210(d) requires every MSB to develop, implement, and maintain an effective anti-money laundering program. The keyword there is maintain. FinCEN and the IRS, which conducts Title 31 compliance examinations for MSBs, both interpret “maintain” to mean the program must be regularly reviewed and updated.

The IRS Internal Revenue Manual (IRM 4.26.7) explicitly directs examiners to verify that a business’s written AML policies are current and commensurate with its risk. In other words, your manual must evolve as your business evolves.

In Florida, this requirement is reinforced under Rule 69V-560.704(3), which states that licensees must maintain AML/BSA procedures that are consistent with federal expectations and tailored to the licensee’s current operations. During state examinations, OFR examiners will often go straight to the “last updated” date in your manual to determine how seriously you take compliance.

Why the Annual Review Matters

A lot can change in a year, especially in the financial services and MSB world. Regulatory guidance shifts, enforcement priorities evolve, and examiners’ expectations grow more sophisticated. Failing to update your AML/BSA manual means failing to account for these moving parts.

Here’s why an annual review is non-negotiable:

Changing Regulations: FinCEN regularly updates its expectations. The Beneficial Ownership Rule expansion, for example, dramatically altered Customer Due Diligence (CDD) obligations for businesses. Similarly, the Geographic Targeting Orders (GTOs) in California and Texas now require certain MSBs to report transactions as low as $200, a huge operational shift that must be reflected in internal procedures. (Although there are preliminary court injunctions challenging this.)

Changing Personnel: If your compliance officer changes, or if key staff leave, your manual must identify the new responsible individuals. Regulators want names, titles, and contact details to match what’s on file with FinCEN.

New Products and Services: Maybe you added money transmission, bill payment, or mobile check-cashing this year. Each product carries different risks. Your risk assessment and procedures for monitoring transactions, verifying customers, and filing reports must be updated accordingly.

Keeping Policy Aligned with Practice: Many businesses fall into the trap of having a “paper program”, a manual that says one thing, while employees actually do another. Regulators compare your written policy to your actual behavior. If they don’t match, that discrepancy becomes a finding.

Demonstrating a Culture of Compliance: A current and accurate AML/BSA manual tells examiners that your business takes compliance seriously. It shows that you’re not simply reacting to audits but maintaining an ongoing compliance process.

What Should Trigger an Out-of-Cycle Update

While the annual review is a minimum requirement, some events demand an immediate revision. These include:

Change in Ownership or Control: If your business changes hands or partners, the responsible persons named in the manual must be updated.

New Products or Technology: Integrating check-cashing software or digital payment systems (like ComplyCheck’s monitoring platform) changes your transaction flow and your risk.

Independent Review Findings: If your most recent independent review identified deficiencies, those must be addressed in your manual.

Regulatory Updates: New FinCEN advisories, state bulletins, or changes to Title 31 should trigger a review.

Bank Feedback: If your banking partner raises compliance concerns, it’s smart to evaluate whether your manual needs strengthening in those areas.

Exam Results: Any cited weaknesses from IRS or state exams should lead to immediate corrective updates.

Operational Changes: Moving locations, expanding hours, or adding new agents all alter your compliance environment.

Think of your AML/BSA manual as a living document. Every time something changes in your business, the manual should “breathe” and reflect it.

Common Mistakes in Manual Maintenance

Even MSBs with strong compliance programs often make simple errors that cost them points in examinations. Here are the most common:

The manual still names an employee who left two years ago as the compliance officer.
Policies reference old forms or procedures (e.g., paper CTRs instead of e-filing).
The risk assessment hasn’t been updated in years.
Independent review recommendations were never integrated into the manual.
The “last updated” date is more than 12 months old, or worse, blank.
Generic, off-the-shelf templates that don’t address the MSB’s specific operations, such as corporate check cashing and money transmission.

Regulators are quick to spot these inconsistencies. If your manual looks outdated, they’ll assume your compliance program is outdated too.

How Examiners Evaluate Your Manual

When examiners sit down for an IRS Title 31 or state review, the manual often sets the tone for the entire exam. Here’s what they look for:

Relevance and Accuracy: Does the manual describe the actual processes used in your day-to-day business?
Currency: Is there evidence that it’s been reviewed recently (signatures, dates, version numbers)?
Customization: Is the manual tailored to your specific operation, or is it a generic “fill-in-the-blanks” policy?
Integration of Findings: Have previous recommendations or deficiencies been addressed?
Consistency with Risk: Do your written policies reflect the risks outlined in your risk assessment?

A strong manual can set a positive tone for the entire examination. A weak or outdated one immediately raises suspicion that your compliance culture is superficial.

Conducting an Effective Manual Review

The review process doesn’t need to be complicated, but it does need to be thorough and well-documented.

Compare your manual to current regulations

Start by reviewing the most recent FinCEN and IRS Title 31 guidance, as well as any new state bulletins. Look for threshold changes, reporting expectations, or terminology updates.

Verify the Five Pillars

Every AML/BSA program must include the following elements:

Internal Controls – Are your procedures for detecting suspicious activity still accurate?
Designated Compliance Officer – Is the listed individual still current and trained?
Employee Training – Does your manual include a schedule and documentation method?
Independent Testing – Does the manual outline how and when reviews occur?
Customer Due Diligence (CDD) – Are beneficial ownership and risk-rating procedures current?

Incorporate findings from your last exam or review

If an examiner or reviewer noted deficiencies, document how they were corrected. This shows continuous improvement.

Update and document

Once the review is complete, prepare a summary memo noting the date of review, who conducted it, and what changes were made. Both the compliance officer and the business owner should sign and date the updated manual.

Train your staff

Every change, no matter how small, should be communicated to employees who handle transactions, CTRs, or customer verification. The best manual in the world won’t help if no one knows what’s in it.

Why Manual Reviews Often Get Pushed Aside

It’s easy to understand why this task gets neglected. MSB owners and compliance officers are juggling multiple priorities: daily transactions, CTR filings, customer onboarding, and, of course, keeping up with customers themselves.

But an outdated manual can be a silent risk multiplier. Examiners often treat it as a reflection of your overall compliance posture. If your manual is out of date, they’ll assume your transaction monitoring, training, and SAR processes might be too.

In extreme cases, failing to maintain a current AML program can lead to civil penalties or even license suspension. Florida examiners are particularly sensitive to manual maintenance because it directly impacts operational risk.

The ComplyCheck Advantage

At ComplyCheck, we review and update hundreds of AML/BSA compliance manuals each year. With more than 750 independent reviews completed across United States, we see firsthand what examiners focus on and what gets MSBs in trouble.

Our process goes beyond simply updating dates and names. We:

Review your policies against current FinCEN and state guidance.
Tailor your manual to your actual operations; whether you’re a small neighborhood check casher or a multi-location MSB.
Integrate findings from recent reviews or examinations.
Ensure alignment between your manual, your independent review reports, and your CTR/SAR procedures.
Document all changes and provide a version history for examiners.

Many of our clients tell us that their manual review was the single most valuable compliance exercise of the year, because it forced them to see how their written policies compared to what was really happening in the store.

Looking Ahead: The Future of AML Manuals

The compliance landscape is changing fast. FinCEN’s implementation of the Beneficial Ownership Information (BOI) database, the expansion of digital recordkeeping expectations, and the potential rollout of AI-driven transaction monitoring tools mean that the AML/BSA manual of the future will look very different from today’s.

Soon, manuals will not just describe your compliance procedures, they’ll integrate them. Your transaction monitoring systems, customer databases, and reporting dashboards will all link back to documented policies. Examiners will expect real-time data to support what your manual claims.

Businesses that start maintaining living, digital compliance manuals now will be miles ahead when that day comes.

Don’t Wait Until Your Next Exam

If your manual hasn’t been reviewed in over a year, or if you can’t remember the last time you opened it, don’t wait for an examiner to remind you. Schedule a review now.

Even if no major updates are needed, documenting the process demonstrates proactive compliance and builds credibility with regulators. It’s one of the simplest, most cost-effective ways to reduce your regulatory risk.

Final Thoughts

Your AML/BSA compliance manual is the foundation of your compliance program. It defines your internal controls, your reporting responsibilities, and the standards by which examiners measure you.

Updating it annually isn’t just a best practice, it’s an expectation. And for MSBs operating in today’s high-scrutiny environment, that expectation can make the difference between a clean exam and an expensive enforcement action.

If you’re unsure whether your manual meets current federal and state requirements, or if you simply want an expert set of eyes, ComplyCheck can help. We specialize in building, reviewing, and maintaining AML/BSA programs that stand up to the toughest IRS and state examinations.

Reach out today to schedule a manual review and keep your compliance program one step ahead.

Back to blog