Bank Regulators Propose to Align AML Compliance Requirements

The FDIC, the Federal Reserve, the Office of the Comptroller of the Currency and the National Credit Union Administration requested comment on a proposed rulemaking to align their AML compliance program requirements "with changes that are being concurrently proposed by the [FinCEN]" pursuant to the Anti-Money Laundering Act of 2020 ("AML Act").

The proposed rule adds customer due diligence requirements and codifies existing supervisory expectations to conform to AML Act changes. The proposed rule includes AML Act requirements on FinCEN to implement a system for maintaining beneficial ownership information for closely held entities such as LLCs, as well as foreign companies authorized to do business in the United States, which went into effect at the beginning of 2024.

The proposed rule would require financial institutions to modify their AML compliance programs to, among other things: (i) use consistent terms, like "countering the financing of terrorism ("CFT")" for an institution's statutory compliance program requirement; (ii) incorporate aspects of the AML/CFT Priorities issued by the Secretary of Treasury as part of each institution's "effective" and "risk-based" AML/CFT compliance program; and (iii) make clear that the duty to establish, maintain and enforce an AML/CFT program is the "responsibility of, and [is to] be performed by, persons in the United States who are accessible to, and subject to, oversight and supervision by [US regulators]." The agencies underscored that AML/CFT compliance programs are to be predicated on a risk-based assessment process that is updated on a periodic basis.

The proposal provides for a 60-day comment period following publication in the Federal Register.