On June 28, 2024, FinCEN announced a proposed rule to strengthen and modernize financial institutions’ anti-money laundering and countering the financing of terrorism (AML/CFT) programs. According to FinCEN, the proposed rule would amend the existing regulations to explicitly require that AML/CFT programs be effective, risk-based, and reasonably designed.
If finalized, the proposed rule would:
Amend the existing program rules to explicitly require financial institutions to establish, implement, and maintain effective, risk-based, and reasonably designed AML/CFT programs with certain minimum components, including a mandatory risk assessment process;
Require financial institutions to review government-wide AML/CFT priorities and incorporate them, as appropriate, into risk-based programs, as well as provide for certain technical changes to program requirements; and
Promote clarity and consistency across FinCEN’s program rules for different types of financial institutions.
The proposed rule seeks to avoid one-size-fits-all approaches to customer risk that can lead to financial institutions declining to provide financial services to entire categories of customers. Additionally, the proposed rule would encourage financial institutions to modernize their AML/CFT programs where appropriate to responsibly innovate, while still managing illicit finance risks.
Written comments will be accepted for 60 days following its publication in the Federal Register.
Read FinCEN’s press release here.
The proposed rule will be available on 7/3/2024 here.