On September 15, 2020, the Financial Crimes Enforcement Network (FinCEN), the US anti-money laundering (AML) agency, published a final rule that completes the circle of all banking organizations being treated the same for purposes of AML compliance requirements for banks. The final rule covers banks that do not have a Federal functional regulator, such as private banks and non-federally insured credit unions. With the final rule, these banks will be subject to the following federal AML requirements:

  • Anti-money laundering compliance programs
  • Customer Identification programs
  • Beneficial ownership requirements for legal entity customers

The final rule is effective November 16, 2020.

On September 17, 2020, FinCEN published an Advance Notice of Proposed Rulemaking (ANPRM) asking for comments concerning a potential rulemaking to incorporate a requirement for an “effective and reasonably designed” AML compliance program for financial institutions subject to AML compliance program requirements.

After discussing the background and reasoning for issuing the ANPRM, FinCEN poses eleven questions, including the following:

  • Has FinCEN clearly explained its proposed “effective and reasonably designed” AML program requirement and its core elements?
  • Should the proposed “effective and reasonably designed” requirement be applicable to all financial institutions currently required to establish AML compliance programs?
  • Should there be an explicit requirement for an AML risk-assessment process and are there ways to articulate objective criteria for examination of that risk assessment process?
  • Should there be changes to other AML regulations if FinCEN decides to incorporate the “effective and reasonably designed” requirement into the FinCEN regulations?
  • FinCEN notes that one of the reasons for the proposed “effective and reasonably designed” AML program requirement would be to provide financial institutions with greater flexibility to reallocate resources for AML compliance, but wants to know whether financial institutions believe that it would increase or decrease their AML regulatory burden?

Comments are due on or before November 16, 2020.