ALEXANDRIA, Va.— Federal banking regulators and the NCUA on Tuesday proposed a joint overhaul of anti-money laundering and countering the financing of terrorism program rules that would shift banks and credit unions more explicitly toward a risk-based compliance model, while clarifying that only significant or systemic failures—not minor implementation gaps—would trigger the most serious AML/CFT enforcement actions.
The amendments, the agencies stated in a joint release, 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).
"The Bank Secrecy Act (BSA) refers to the statutory framework imposing various AML/CFT regulatory requirements on financial institutions, including banks and credit unions supervised by the agencies. In 2020, Congress passed the Anti-Money Laundering Act of 2020 (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 BSA, as well as to ensure consistency between FinCEN’s and the agencies’ separately authorized compliance program requirements," the agencies said.
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. In addition, 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 the date of publication in the Federal Register.