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[ AML POLICY ]
Letters to FinCEN:
Bank comments on proposed AML standarDS
Last September, the Financial Crimes Enforcement Network (FinCEN) requested comments on
a proposed regulation in an advanced notice of proposed rulemaking (ANPRM) that would——for the first time——create efficacy standards for anti-money laundering(AML)programs.U.S. regulators have long developed and reinforced the importance of testing, but theyhavenotpreviouslycreated standards for effectiveness. Now they are planning a holistic restructuring, and the request to submit letters provided financial institutions (FIs) with an unprecedented opportunity to set out their own requirements for an improved AML regime.
FIs and other interested parties submitted 110 letters in total over a two-month comment period. These letters detail whether FIs support or oppose the draft rule in principle, what changes they would like to see in AML standards and how they expect these will affect their programs. However, an overall summary of these replies is not available on FinCEN’s website, nor is there any useful categori- zation of replies available. Instead, the only way to read banks’ comments is to download the letters one by one, note the submitting entity and then summarize, segment, tabulate and assess these responses for the public, as this article attempts to do.
In this ANPRM, FinCEN’s request for comments posed 11 questions that can be clustered into the following three groups:
1. Three questions on the clarity of and appropriateness of the proposed new rule
2. Threequestionsonhowthe proposed standard should be applied
3. Fivequestionsontheexpected consequences for FIs
This summary confines itself to a review of only the letters received from banks and their lobbying organizations. In all, this includes 24 letters: seven from large
banks (categorized here as those with assets over $100 billion) and 17 from banks under that level.
Many of the letters did not answer some of the questions posed and others did not answer any of the questions; instead, they addressedtheimplicationsoftherule more generally. Analyzing the answers to these questions reveals that the majority ofbankssupporttheproposedrulein principle, but opinions diverge on how it should be applied. There is also a general agreement that depending on how the standard is implemented, the regulatory burden will increase.
62 [ JUNE–AUGUST 2021 ]
The majority of banks support the proposed rule in principle, but opinions diverge on how it should be applied