ABA, BPI urge cross-regulator ‘no-action’ letters for AML/BSA innovations

The American Bankers Association joined the Bank Policy Institute in expressing support for the Financial Crimes Enforcement Network’s efforts to implement a process for issuing “no-action” letters in a comment letter submitted today. Under a no-action letter, FinCEN would provide the requesting institution with assurance that the agency would not take action against the institution regarding the innovative processes or programs described in the letter.

The associations also urged FinCEN to create a no-action letter process that best ensures that other regulators recognize and accept the no-action letters that FinCEN issues. A “no-action letter issued by FinCEN that is not accepted by all regulators will leave financial institutions with significant exposure to regulatory action, thereby discouraging use of the no-action letter program,” said the associations. “Banks of all sizes are unlikely to devote the level of resources necessary to execute on an initiative that requires a no-action letter if they cannot fully rely on it.”

The associations also asked FinCEN to allow financial institutions and their trade associations to apply for a no-action letter, and for FinCEN to provide a response to a no-action letter request within 60 days. In addition, the associations asked FinCEN, if it determines to revoke a no-action letter it had previously issued, to provide the institution that had requested the letter with 18 months to “unwind” any changes it made to its anti-money laundering program in reliance on the letter. The associations also asked that no-action letters be afforded confidential treatment and that FinCEN establish a process to release redacted versions of no-action letters to the public with the requesting institution’s consent.