FinCEN Issues AML, CIP Rules for Banks Without Federal Regulator

The Financial Crimes Enforcement Network today issued a proposed rule imposing — for the first time — anti-money laundering program and Customer Identification Program requirements for banks without a federal functional regulator. These include state-chartered non-depository trust companies, private banks, non-federally insured banks and thrifts and international banking entities in U.S. Caribbean territories.

The proposed rule would prescribe minimum standards for AML programs and include these institutions in CIP, thus “eliminat[ing]the present regulatory ‘gap’ in AML coverage” and “reduc[ing]the opportunity for criminals to seek out and exploit banks with less rigorous AML requirements.”

Covered institutions are already subject to various Bank Secrecy Act recordkeeping and reporting requirements, so FinCEN said the proposal would not be “unduly burdensome.” Comments on the proposal are due by Oct. 24. For more information, contact ABA’s Phoebe Papageorgiou.