First Post in a Three-Post Series Regarding Recent Regulatory Action by FinCEN
The Financial Crimes Enforcement Network (“FINCEN”) has been busy. In the last two weeks, FinCEN has posted three documents in the Federal Register. Any one of these publications, standing alone, would be significant, particularly given the infrequency of such postings. Collectively they reflect an unusual flurry of regulatory activity by FinCEN, perhaps spurred by the impending election and potential management turn-over at FinCEN. These publications are:
- A final rule (“Final Rule”) extending BSA/AML regulatory requirements to banks lacking a Federal functional regulator;
- An advanced notice of proposed rulemaking regarding potential regulatory amendments regarding “effective and reasonably designed” anti-money laundering (“AML”) programs; and
- A request for comment on existing regulations regarding enhanced due diligence for correspondent bank accounts.
Today, we discuss the Final Rule, published on September 14, 2020, extending BSA/AML regulatory requirements to banks lacking a Federal functional regulator. In our next posts, we will discuss the advanced notice and request for comment.
The Final Rule provides that banks lacking a Federal functional regulator now will be required to (i) develop and implement an AML program, (ii) establish a written Customer Identification Program (“CIP”) appropriate for the bank’s size and type of business, and (iii) verify the identity of the beneficial owners of their customers. While stressing the perceived importance of closing this prior gap in regulatory coverage, FinCEN also attempted to minimize concern that the Final Rule would impose a serious burden on the covered financial institutions. The Final Rule will become effective on November 16, 2020, with a compliance deadline of March 15, 2021.
Continue Reading Regulatory Round Up: FinCEN Extends BSA/AML Requirements to Banks Lacking a Federal Functional Regulator