A coordinated move by the Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), and National Credit Union Administration (NCUA) has introduced a proposal for modernizing anti-money laundering (AML) and countering the financing of terrorism (CFT) rules for financial institutions across the United States. The process seeks to align regulatory requirements with recent recommendations established by the Financial Crimes Enforcement Network (FinCEN), part of the U.S. Department of the Treasury.
The proposal follows guidance set out in the Anti-Money Laundering Act of 2020, reflecting ongoing government efforts to refine approaches against illicit finance within the financial sector.
Greater focus on risk-based compliance programs
At the core of the new proposal is a shift toward a risk-based structure for AML and CFT programs. Financial institutions, including banks and credit unions, would be tasked with concentrating compliance resources where risks are highest, notably for specific clients and activities deemed more prone to abuse.
Activities and customers assessed as low risk would be subject to proportionately less oversight. This differs from the more uniform scrutiny that commonly prevails under existing standards.
In a recent update, the FDIC emphasized the importance of targeted regulation, describing the move as an advance toward enhanced compliance and accountability.
The FDIC Board also approved a proposed rule to update requirements related to anti-money laundering and countering the financing of terrorism.
Supporting this updated focus, regulatory authorities highlight the intention to make compliance efforts more meaningful for law enforcement, while allowing institutions flexibility to adapt programs to their particular risk profiles.
The rule would introduce a condition requiring the designated AML and CFT compliance officer at each bank to be physically located within the United States. This individual would need to remain accessible to supervisors, a move intended to ensure direct regulatory communication.
Clearer standards for enforcement and improved interagency cooperation
In addition to redefining compliance efforts, the proposal introduces clarified enforcement criteria. Only failures that are serious or widespread in the institution’s program implementation would lead to formal action. Such provisions are designed to give institutions more confidence and predictability in understanding regulatory expectations.
The rule outlines a formal consultation mechanism with FinCEN for certain supervisory or enforcement measures. This framework aims to increase consistency between FinCEN and the federal banking regulators during cases involving significant action, further streamlining regulatory oversight.
Banks would also be authorized to share information related to AML and CFT compliance directly with FinCEN, strengthening lines of communication between the private sector and government agencies dedicated to fighting financial crime.
A public comment window is open for stakeholders, including financial institutions and credit unions, to review and respond to the proposed rules. This step reflects the agencies’ intent to engage the broader financial community before making the updates permanent.
The FDIC, as an independent agency supervising U.S. banks and protecting depositors, works closely with the OCC, responsible for overseeing national banks, and the NCUA, which regulates and insures federal credit unions. Their joint initiative marks a notable development for compliance requirements in the sector.
