Compliance Q&A: OFAC

Can CUs set up just one account for all OFAC-blocked funds?

May 12, 2010

Q Must a credit union set up individual accounts for each Office of Foreign Assets Control (OFAC)-blocked party, or can it set up one account to house funds from all blocked accounts?

 



A OFAC allows a credit union to choose either method. Once it has been determined that funds need to be blocked (i.e., frozen), they must be placed into a dividend- or interest-bearing account on the credit union’s books from which only OFAC-authorized debits may be made.

Some financial institutions open separate accounts for each blocked party while others opt for an “omnibus account” to house funds from all blocked accounts. Either method is permissible as long as there’s an audit trail that will allow specific funds to be unblocked with interest at any point in the future.

Valerie Moss is director of compliance information for the Credit Union National Association.