ALEXANDRIA, Va. — NCUA has joined with other federal banking regulators in inviting public comment on a proposed rule that would update anti-money laundering and counter-terrorism financing requirements for financial institutions.
NCUA, along with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency said the proposal would amend requirements for supervised institutions to establish and maintain risk-based programs designed to identify, assess and mitigate illicit finance risks. The changes are intended to align existing rules with updates being proposed by the Treasury Department’s Financial Crimes Enforcement Network, according to the statement.
The regulators said the proposal reflects broader efforts to modernize oversight under the Bank Secrecy Act and implement reforms mandated by the Anti-Money Laundering Act of 2020.
Congress directed regulators through the 2020 law to strengthen the anti-money laundering and countering the financing of terrorism (AML/CFT) framework to improve outcomes for financial institutions, law enforcement and national security, the agencies said.
Under the proposal, the agencies would revise their regulations to align with those statutory changes and ensure consistency with FinCEN’s compliance requirements.
The Key Provisions
Key provisions in the proposal include:
- Risk-Based Approach: The rule would incorporate provisions requiring institutions to design AML/CFT programs based on risk, directing more resources toward higher-risk customers and activities rather than lower-risk ones, consistent with each institution’s risk profile.
- Program Requirements and Oversight: The proposal would outline requirements for establishing AML/CFT programs; explicitly incorporate FinCEN’s existing customer due diligence requirements; clarify that a designated AML/CFT officer must be based in the United States and accessible to regulators
- Program Maintenance and Enforcement Standards: The agencies said the rule would require institutions to maintain AML/CFT programs “in all material respects” once established. It would also clarify that enforcement or significant supervisory actions would apply only in cases of “significant or systemic failures,” according to the statement.
- Enhanced coordination with FinCEN: The proposal would establish a new consultation framework between the agencies and FinCEN for certain supervisory and enforcement actions; and clarify that banks may share information with FinCEN related to AML/CFT supervisory and enforcement matters
‘Improved Consistency’
The agencies said the proposed changes are designed to improve consistency across regulators and strengthen coordination with FinCEN as part of a broader modernization of the AML/CFT framework.
Public comments on the proposal will be accepted for 60 days following its publication in the Federal Register, according to the agencies’ statement.
For more information, go here.
