FinCEN seeking feedback on AML/CFT regime ahead of report to Congress

The report is mandated under the Anti-Money Laundering Act of 2020, which became law in January as part of the National Defense Authorization Act for Fiscal Year 2021. In the report, Yellen must share the findings of a formal review into BSA regulations and related guidance, including administrative and legislative recommendations.

FinCEN’s request for information (RFI), published in the Federal Register on Wednesday, seeks stakeholder feedback on ways to “streamline, modernize, and update the anti-money laundering and countering the financing of terrorism (AML/CFT) regime of the United States.” Comments are due by Feb. 14, 2022.

“We recognize that the illicit finance threat landscape continues to evolve and that technology and innovation now play an important role in the efficient application of resources to combat illicit finance,” said FinCEN Acting Director Himamauli Das in a press release. “I urge all relevant stakeholders to review the RFI and comment on ways that FinCEN can modernize AML/CFT regulations and guidance and better promote a risk-based approach to AML/CFT compliance.”

The AML Act requires FinCEN, as part of the Treasury Department, to ensure the BSA does not include outdated or redundant guidance. Examples include regulations that no longer promote the maintenance of risk-based safeguards that adequately address the law’s original purpose or are no longer useful or appropriate. Further, regulations that do not consider innovation or technological advancements in the financial system would be in line to be addressed.

Questions FinCEN is asking as part of its RFI include the following:

• Are there any threats, vulnerabilities, or risks you think the Treasury Department is unaware of, or that you think Treasury is not responding to with sufficient and appropriate safeguards?
• Do AML program requirements for financial institutions sufficiently address the threats, vulnerabilities, and risks faced by the U.S. financial system?
• Are there specific changes to BSA reporting or recordkeeping requirements that would provide information that is more useful to law enforcement in countering financial crimes or allow financial institutions to better understand what information to report?
• Are there any BSA regulations or guidance that are obsolete because of changes in compliance business practices and/or technological innovation in the financial system or elsewhere?
• Do FinCEN’s regulations and guidance sufficiently allow financial institutions to incorporate innovative and technological approaches to BSA compliance?

As part of the AML Act, FinCEN in June published the first government-wide list of AML/CFT priorities. Final regulations addressing how financial institutions should incorporate these priorities into their AML compliance programs are expected by the end of the year.