Page 64 - ACAMS-Today-V20N3

[ AML POLICY ]
supported this, and six of the small banks agreed while two disagreed. Those approving generally requested that FinCEN establish guiding principles, without a set format or frequency, and that these permit FIs to design their own dynamic risk assessment processes.
The sixth question asked whether FinCEN should issue national AML priorities and have risk assessments consider them. This was approved by all but one of the large banks. The dissenting bank urged the expansion of the current advisory issuance process as an alternative. Seven small banks answered approvingly and three opposed. The seven that approved all commented, with some making multiple points, two endorsed the proposed two-year national priority issuance schedule, one stated that the schedule should be flexible and another requested for stale priorities to be removed. One asked that their examiners assess them on incorporating the national priorities into their policies and procedures only, and
another suggested that they be evaluated on feedback from law enforcement on their effectiveness and not on technical compliance. Two approved the issuance of national priorities but disagreed with creating an explicit requirement that bank risk assessments consider them. One of the three banks that opposed an explicit requirement asked that the guidance process be improved instead, a second requested that they be given three to five years to incorporate the national priorities, and a third found the recommendations nonactionable and unrelated to their risks.
What are the implications of the rule for FI programs?
FinCEN posed five questions on the expected implications for FI programs.
Question seven asked FIs what additional changes to AML program policies, procedures or processes needed to be implemented and how they could mitigate those requirements as regulators. Among large banks, only one responded, stating that it would review its program and reorient efforts to higher risk areas. Seven small banks responded,
requesting an implementation period that varied by respondent from nine months to two years. Two small banks described their expectations: one anticipated a long implementation timeline and high costs, and the other stated that it would need to “understand specific data points and red flags involved” before it could assess the risk with each priority, and that “this information should be provided by FinCEN.” Three requested FinCEN to assist in their implementation by 1) establishing information sharing with law enforcement; 2) expanding the “guidance that clarifies and addresses the nature of the evolving landscape of financial services”; and 3) providing feedback from law enforcement. With respect to this last point, the bank emphasized that “feedback will help institutions to know what they are doing that is helpful and where they can alter or enhance their reporting to ensure law enforcement is being provided with the most useful information possible.”
Question eight asked whether the rule should vary or be uniform. Only one large bank responded, asking for the rule to vary, as did five small banks. One of the banks that asked for variance provided reasoning and recommended that bank adoption should be encouraged by providing banks that choose to partic- ipate with “additional protections and safe harbor from regulatory scrutiny regarding the institution’s AML program.” Another bank that asked for modification
64 [ JUNE–AUGUST 2021 ]