Two proposals to create new Bank Secrecy Act rules for investment advisers and professionals involved in certain residential real estate transactions should be further refined to avoid unintentionally sweeping in banks and trust companies already subject to robust BSA regulation, the American Bankers Association said today in a letter to Financial Crimes Enforcement Network Director Andrea Gacki.
FinCEN in February proposed two rulemakings. One was to place BSA requirements on investment advisers. The second proposed rule was to require certain professionals involved in residential real estate closings and settlements to report information to the agency about non-financed transfers of residential real estate to legal entities or trusts. In its letter, ABA said it does not believe the agency meant for the proposals to cover banks and trust companies. Among other things, the association suggested FinCEN revise the definition of “investment adviser” in the rulemaking to exclude persons subject to enterprise-wide BSA regulation at depository institutions or trust companies. ABA also suggested adding similar language to the residential real estate professional proposal, refining the definition of a “reporting person” to exclude activities performed by banks, trust, companies and their affiliates already subject to enterprise-wide BSA regulations to avoid potential confusion.
To preserve “rigorous enterprise-wide BSA standards” and to “avoid confusing, duplicative examinations and other highly undesirable policy outcomes,” ABA urged FinCEN to “refine the definitions to expressly exclude banks and trust companies and all persons subject to a bank’s or trust company’s enterprise-wide AML program from both proposed rules.”
