Lawmakers Want AML Rules to Target Bigger Threats

Two lawmakers have asked the Financial Crimes Enforcement Network (FinCEN) to ensure that reducing unnecessary compliance burdens and prioritizing high-risk financial crimes in its enforcement efforts are part of its current rulemaking process.

House Committee on Financial Services Chairman French Hill (R-Ark.) and Subcommittee on National Security, Illicit Finance, and International Financial Institutions Chairman Warren Davidson (R-Ohio) urged this and other measures in a June 9 letter to FinCEN Director Andrea Gacki, they said in a Wednesday (June 17) press release.

The lawmakers sent the letter in response to FinCEN’s Notice of Proposed Rulemaking (NPRM) on Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Programs, saying the NPRM presents an opportunity to enhance Bank Secrecy Act (BSA) implementation.

In the letter, Hill and Davidson said BSA enforcement should focus on the identification of AML/CFT risk rather than failures that have little relevance to law enforcement; Currency Transaction Report (CTR) and Suspicious Activity Report (SAR) thresholds should be raised for the first time in decades to account for inflation; and regulators should encourage financial institutions to adopt new artificial intelligence-powered AML/CFT tools.

“We are encouraged by the NPRM’s aim to fundamentally shift BSA compliance from a pattern of box checking and low-value reporting to one that provides law enforcement with the information it needs to identify and stop financial crime,” Hill and Davidson wrote in the letter. “We look forward to continuing to work with you to develop a final rule that follows through on AMLA’s [Anti-Money Laundering Act of 2020] mandates and meets the objectives set out in the NPRM.”

FinCEN and three federal financial regulators proposed rules on April 7 that they said would modernize their AML/CFT rules and allow financial institutions to focus on higher risks.

FinCEN said at the time in a press release that its proposed rule, detailed in the NPRM, would “fundamentally reform” financial institutions’ AML/CFT programs under the BSA by reducing the compliance burden and promoting risk-based programs.

On the same day, the Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA) and the Office of the Comptroller of the Currency (OCC) said that they issued a proposed rule that would align their AML/CFT rules with those proposed by FinCEN.