With a move it says will “ensure consistent Bank Secrecy Act coverage across the banking industry,” the Treasury Department’s Financial Crimes Enforcement Network is proposing new requirements that banks lacking a Federal functional regulator implement anti-money laundering programs.
FinCEN, with a rule proposal on Aug. 25, is also looking to extend beneficial ownership and customer identification programs (CIP) requirements to additional banks.
Since 1987, all federally insured depository institutions and credit unions have been required by their Federal regulators to have anti-money laundering programs in place and monitor their effectiveness. Until the passage of the Patriot Act in 2001, however, the requirement to implement these programs did not arise under a specific provision of the Bank Secrecy Act itself. The legislation authorized FinCEN to prescribe minimum standards for AML programs.
The rule proposal will remove the anti-money laundering program exemption for banks that lack a Federal functional regulator, including, but not limited to, private banks, non-federally insured credit unions, and certain trust companies.
FinCEN says there are approximately 740 banks without a federal regulator. Because they are currently covered by many other BSA obligations, including filing suspicious activity reports and currency transaction reports, it anticipates “they will be able to leverage existing policies, procedures, and internal controls required by other statutory and regulatory requirements to fulfill the proposed obligations.”