Federal financial regulators are seeking public input on a proposed rule to amend requirements for their institutions to establish and maintain effective anti-money laundering and countering the financing of terrorism (AML/CFT) programs.
The amendments, jointly proposed by the Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), and the National Credit Union Administration (NCUA), are intended to align each agency’s AML/CFT rules with changes concurrently proposed by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).
In 2020, Congress passed the Anti-Money Laundering Act (AML Act), which directed FinCEN and the agencies to modernize and strengthen the AML/CFT regulatory framework to encourage more effective outcomes for financial institutions, regulators, law enforcement, and national security agencies. The agencies are proposing to revise their respective regulations to reflect these broader revisions to the Bank Secrecy Act (BSA) and to ensure consistency between FinCEN’s and the agencies.
Among other changes, the proposed rule would:
- Incorporate the AML Act provision that a bank’s AML/CFT program should be risk-based, including ensuring that banks direct more attention and resources toward higher-risk customers and activities, consistent with the risk profile of the institution, rather than toward lower-risk customers and activities.
- Describe the requirements for a bank to establish an AML/CFT program; explicitly incorporate FinCEN’s existing customer due diligence requirement; and clarify that a bank’s designated AML/CFT officer must be located in the U.S. and accessible to regulators.
- Require that once a bank has properly established its AML/CFT program, the institution maintains that program in all material respects. Also, the proposed rule would clarify that only significant or systemic failures to implement a properly established program would warrant an “AML/CFT enforcement action” or a “significant AML/CFT supervisory action.”
- Enhance FinCEN’s role in the agencies’ supervision and enforcement process by establishing a new consultation framework for certain actions by the agencies.
- Clarify that banks may share any information with FinCEN related to certain AML/CFT supervisory and enforcement actions.
Comments on the proposed rule are due 60 days after it is published in the Federal Register.