Banking regs join FinCEN in proposing AML/CFT risk assessment rule

Four federal banking regulators have joined the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) in issuing a notice of proposed rulemaking that would require financial institutions to conduct more thorough risk assessments on their anti-money laundering/countering the financing of terrorism (AML/CFT) programs.

The Federal Reserve Board of Governors (the Fed), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), and the Treasury’s Office of the Comptroller of the Currency (OCC) issued a joint statement Friday with FinCEN, requesting public comment on the proposed rule.

The rule, proposed in June, would “explicitly require that such programs be effective, risk-based, and reasonably designed, enabling financial institutions to focus their resources and attention in a manner consistent with their risk profiles,” FinCEN said in a press release. The new requirements were included in the AML Act of 2020, which became law in 2021. The law comprehensively updated the Bank Secrecy Act (BSA) for the first time in decades, according to FinCEN.