NEWS: Today, The League filed a comment letter with FinCEN on a proposal to modernize its requirements for Bank Secrecy Act (BSA) programs – now to be called anti-money laundering and countering the financing of terrorism (AML/CFT) programs.
Among other things, the proposal would require credit unions and other 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.” The proposed rule also would require financial institutions to incorporate into their risk-based programs FinCEN’s “AML/CFT National Priorities,” which FinCEN resets every four years (most recently in 2021).
You can read more about the proposed rules in this Aug. 5, 2024 Comment Call. This FinCEN Fact Sheet summarizes them, and this Interagency Statement from the NCUA and other regulators offers a recap, as well.
The League told FinCEN that Wisconsin’s credit unions are ready to keep doing their part in the fight against money laundering and terrorism. Still, we asked FinCEN to consider the following suggestions as it finalizes this rule:
- FinCEN can help ease the transition to the new AML/CFT regime, and the compliance burdens it will introduce (especially for small financial institutions, like credit unions) by making the rule effective 12 to 18 months after it is finalized (not six months) and by providing guidance to help clarify the agency’s expectations.
- FinCEN can further reduce regulatory burdens by raising the threshold for CTRs from $10,000 to at least $30,000 and by raising the threshold for SARs from $5,000 to at least $10,000.
- FinCEN should de-emphasize its proposed AML/CFT oversight requirements for boards of directors, especially since credit union directors are volunteers.
NCUA’s AML/CFT proposal still pending
Soon after FinCEN issued its proposal, the NCUA and other federal financial regulators issued a similar interagency proposal to update their regulations, so the language of their rules will be consistent with FinCEN’s requirements.
The League will comment on the NCUA’s proposal, likely filing a letter that is much like our recent letter to FinCEN. But if you would like us to address different concerns or to make other changes to our comments, please reach out to Paul Guttormsson by Oct. 1, 2024, so we can include your feedback in our letter to the NCUA, which is due Oct. 8, 2024.