Financial Crime World

Here is the article in markdown format:

FinCEN Proposes Rule for Anti-Money Laundering (AML)/Countering the Financing of Terrorism (CFT) Programs

The Financial Crimes Enforcement Network (FinCEN) has released a proposed rule for AML/CFT programs, outlining key changes and requirements for financial institutions. Here are some key points to consider:

Changes to AML/CFT Programs

  • The proposal emphasizes that financial institutions must establish, maintain, and enforce an AML/CFT program, with responsibility remaining with persons in the US who are accessible to, and subject to oversight by, the Secretary of the Treasury and the appropriate Federal functional regulator.
  • An AML/CFT program must be approved and subject to oversight by a financial institution’s board of directors or equivalent body.

Broader Considerations

  • The proposal advocates for risk-based AML/CFT programs to avoid one-size-fits-all approaches that can lead to de-risking (declining to provide services to entire categories of customers).
  • It encourages innovation in AML/CFT programs, allowing financial institutions to modernize their programs with responsible innovation while managing illicit finance activity risks.
  • The proposal seeks to promote feedback loops between the US government and financial institutions, facilitating a focus on AML/CFT priorities.

Role of Federal Banking Agencies

  • FinCEN prepared the proposal in consultation with the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency to collectively issue proposed amendments to their respective BSA compliance program rules.

Next Steps

  • The AML Act envisions significant reforms to the US AML/CFT regime, with this proposal setting a critical foundation for potential future changes.
  • FinCEN is committed to modernizing the AML/CFT regime, encouraging innovation, advancing law enforcement and national security objectives, and further safeguarding the US financial system from illicit activity.

For Further Information

  • Financial institutions can send questions or comments regarding the contents of this fact sheet to the FinCEN Regulatory Support Section at frc@fincen.gov.