Regulators Preview Forthcoming BSA/AML Rule Changes

As FinCEN works to create a long-awaited database of beneficial ownership information—a key provision of the Anti-Money Laundering Act of 2020—regulators today reminded banks that they must continue to adhere to existing beneficial ownership requirements. “We’ve had several bankers call and specifically ask if they can stop collecting beneficial ownership information,” the FDIC’s Lisa Arquette noted during a regulator panel at the ABA/ABA Financial Crimes Enforcement Conference. “There has been no change—we will not be examining differently. We will be looking for beneficial ownership information.”

James Martinelli, director of FinCEN’s office of regulatory policy, added that the full implementation of the Corporate Transparency Act (the provision of the AML Act that established the database requirements) will occur “in a phased process” with “multiple rulemakings.” FinCEN last year issued a notice of proposed rulemaking focused on reporting, for which comments are currently being accepted. Additional rulemakings are expected regarding access to the database and ultimately, changes to the customer due diligence rule, which Martinelli noted would most likely come “a year after there are reporting regulations in place.”

Regulators also discussed a list of AML priorities that FinCEN issued in June—another key component of the AML Act. Currently, Martinelli noted that “there’s no regulatory obligation or supervisory expectation that financial institutions do anything with these priorities,” though he noted that FinCEN expects to issue a notice of proposed rulemaking in April to provide further guidance. In the meantime, “we did encourage financial institutions to consider their risk exposure and how they might incorporate the priorities into their AML/CFT programs once the regulations are in effect,” Martinelli said.

The Federal Reserve’s Suzanne Williams added that regulators recognize the need for further guidance on the priorities and how regulators will assess banks’ adherence to them once the rulemaking is finalized. “Over the last decades, the movement of the BSA requirements [has been]from things that are very certain to things that are very subjective,” she said. “We don’t want the assessment of that to be dependent on random variables in the exam process. We want it to be a consistent approach in how we assess effectiveness and [incorporate]the priorities. That’s going to require not only a rule change, but accompanying guidance.”

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