NPRM: Anti-Money Laundering and Countering the Financing of Terrorism Programs (all FIs, incl. MSBs) (91 FR 18704) (Part 2 of 5)
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Research, not advice. Part of the Bitcoin research archive (October 2026). Claims labelled unverified, contested or fringe are reported, not endorsed; statuses of bills and rules are as of the date checked. Government, court and patent records are public domain; the research notes are CC BY 4.0.
policies, procedures and controls, that it institutions. FinCEN considers 2020), https://www.fincen.gov/system/files/shared/
identify, assess, and document its ML/ ‘‘distribution channels’’ to refer to the 314bfactsheet.pdf.
methods and tools through which a 66 See U.S. Department of the Treasury, 2026
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62 See 31 CFR 1029.210 (loan or finance
financial institution opens accounts and National Money Laundering Risk Assessment
companies); 1030.210 (housing GSEs); see also 31 (March 2026), https://home.treasury.gov/system/
CFR 1025.210 (insurance companies); 1028.210
provides products or services,
files/246/2026-NMLRA.pdf; 2026 National Terrorist
(operators of credit card systems). Financing Risk Assessment (March 2026), https://
63 See 31 CFR 1022.210 (MSBs); 1025.210 64 The current program rules without explicit risk home.treasury.gov/system/files/246/2026-
(insurance companies); see also 31 CFR 1021.210 assessment requirements are located at 31 CFR NTFRA.pdf; 2026 National Proliferation Financing
(casinos) (‘‘commensurate with the money 1020.210 (banks); 1021.210 (casinos); 1022.210 Risk Assessment (March 2026), https://
laundering and terrorist financing risks posed by (MSBs); 1023.210 (broker-dealers); 1024.210 home.treasury.gov/system/files/246/2026-
the products and services’’). (mutual funds); and 1026.210 (FCMs and IBCs). NPFRA.pdf.
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18716 Federal Register / Vol. 91, No. 69 / Friday, April 10, 2026 / Proposed Rules
risks associated with different threats extent to which a particular priority is Priorities. In either case, any changes to
and vulnerabilities as they evolve.67 applicable and whether and how a financial institutions’ AML/CFT
Regardless of the source, financial particular AML/CFT Priority should be programs, such as internal policies,
institutions should take measures in incorporated into its risk assessment procedures, or controls, would be based
their risk assessment processes to processes. on the results of risk assessment
ensure this information is reasonably Further, a financial institution may processes and their impact on the AML/
current, complete, and accurate. use its judgment and apply a reasonable, CFT program, including how to review
risk-based determination on whether to and, as appropriate, incorporate the
b. Proposed 31 CFR focus on a specific aspect of an AML/ AML/CFT Priorities before making these
10XX.210(b)(1)(i)(B)—AML/CFT CFT Priority (e.g., cyber-enabled fraud), determinations.
Priorities rather than addressing all aspects of a FinCEN recognizes that some AML/
Proposed 31 CFR 10XX.210(b)(1)(i)(B) AML/CFT Priority that may either not CFT Priorities describe threats at a high
would require financial institutions to be applicable (e.g., digital assets level, or at a point in time, and that
review and incorporate the AML/CFT cybercrime for a financial institution financial institutions may lack the
Priorities. The AML/CFT Priorities set that does not offer any digital asset context or information necessary on
out the priorities for the U.S. products or services, or have any digital which specific threats, or what time
government’s AML/CFT policy as asset customers) or pose lower risks to frames, to consider or focus on when
required by the AML Act and are the financial institution (e.g., conducting their risk assessments. For
designed to ensure that financial proliferation financing risks for a instance, the AML/CFT Priorities that
institutions’ AML/CFT programs are financial institution with no cross- FinCEN issued in June 2021 describes
aligned with those priorities. border operations, customers, ‘‘fraud’’ as one of the eight priorities and
Recognizing the diverse nature of ML/ transactions, or activities). However, discusses specific examples of fraud
TF threats facing the U.S. financial FinCEN cautions that a surface-level, that were especially salient in 2021.
system and national security, and that perfunctory review of an AML/CFT However, the government’s priorities
financial institution AML/CFT programs Priority by a financial institution and may have changed since the publication
benefit U.S. national security by the foreseeable ways in which it may of the AML/CFT Priorities due to
safeguarding the financial system from manifest itself within the financial emergent ML/TF typologies (e.g.,
ML/TF risks, the AML/CFT Priorities institution’s customers, products and sanctions evasions by Russian oligarchs)
are intended to ensure that financial services, geographies, and distribution or ML/TF threats (e.g., pig butchering)
institutions are focusing on the greatest channels would not satisfy this not addressed specifically in the AML/
threats to U.S. national security, as requirement. For example, patterns of CFT Priorities. For example, FinCEN’s
defined by Treasury. transactions that may be consistent with support to Treasury’s efforts to combat
Section 6101 of the AML Act requires potential structuring should not rampant government benefits fraud is
that a financial institution’s review and automatically be dismissed as lower just one example of how the
appropriate incorporation of the AML/ value to law enforcement and government’s focus on specific types of
CFT Priorities into its AML/CFT untethered to an AML/CFT Priority fraud evolves over time.70 This type of
program be subject to supervision and without determining whether there is a fraud may not have been a concern for
examination for compliance with the potential connection to various types of a financial institution in prior risk
BSA and other AML/CFT laws and other illicit finance activity (e.g., assessment processes, but a financial
regulations.68 FinCEN is implementing structuring or similar patterns involving institution may decide to conduct and
this statutory requirement by proposing transactions in narcotics trafficking apply risk assessment processes to
that, as part of their risk assessment proceeds). identify whether such a risk is
processes, financial institutions must Under the AML Act, FinCEN is significant for a financial institution,
review and, as appropriate, incorporate required to update the AML/CFT and that determination may necessitate
the AML/CFT Priorities. The inclusion Priorities not less than once every four changes to a financial institution’s
of the AML/CFT Priorities in risk years.69 Whenever the AML/CFT AML/CFT program.
assessment processes is meant to help Priorities are updated, financial To assist financial institutions with
ensure that financial institutions institutions would no longer be required their risk assessment processes, and to
understand their exposure to risks in to incorporate prior versions of the better identify activity related to the
areas that are of particular importance AML/CFT Priorities. Financial AML/CFT Priorities, FinCEN issues
nationally, which may help financial institutions would only be required to products under its Financial Institution
institutions develop risk-based and incorporate the most recent AML/CFT Advisory Program (Advisory
Priorities into their risk assessment Program).71 FinCEN’s Advisory Program
reasonably designed AML/CFT
processes. communicates priority ML/TF threats
programs.
FinCEN anticipates that some and vulnerabilities to the U.S. financial
FinCEN understands that the AML/
financial institutions may ultimately system. Financial institutions may use
CFT Priorities may not always be
determine that their business models this information to support effective,
applicable to a financial institution’s
and risk profiles have limited exposure risk-based, and reasonably designed
risk profile and activities. Therefore,
to some of the threats addressed in the AML/CFT programs and suspicious
FinCEN requires the incorporation of
AML/CFT Priorities but instead have activity monitoring systems to help
the AML/CFT Priorities in financial
greater exposure to other ML/TF risks generate highly useful information for
institution’s risk assessment processes
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not addressed in the AML/CFT
as appropriate. This means that, having
Priorities. Additionally, some financial 70 U.S. Department of the Treasury, Press Release,
reviewed the AML/CFT Priorities, a
institutions’ risk assessment processes ‘‘Secretary Bessent Announces Initiatives to Combat
financial institution may determine the Rampant Fraud in Minnesota’’ (Jan. 9, 2026),
may determine that their AML/CFT
https://home.treasury.gov/news/press-releases/
67 See, e.g., FinCEN, Financial Trend Analyses,
programs already sufficiently take into sb0354.
https://www.fincen.gov/resources/financial-trend- account some, or all, of the AML/CFT 71 FinCEN, Alerts/Advisories/Notices/Bulletins/
analyses. Fact Sheets, https://www.fincen.gov/resources/
68 31 U.S.C. 5318(h)(4)(E). 69 31 U.S.C. 5318(h)(4)(B). advisoriesbulletinsfact-sheets.
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Federal Register / Vol. 91, No. 69 / Friday, April 10, 2026 / Proposed Rules 18717
law enforcement and national security ii. Proposed 31 CFR 10XX.210(b)(1)(ii)— therefore, does not contemplate
agencies. Mitigate ML/TF Risks Through Risk- regulatory second-guessing of a
Relatedly, since 2021, FinCEN has Based Allocation of Attention and financial institution’s reasonable
published Financial Trends Analyses Resources determinations regarding appropriate
(FTA) highlighting threat pattern and resource allocation or conclusions
Section 6101(b) of the AML Act states
trend information derived from BSA regarding specific risks. However, while
that the AML/CFT programs of financial
data on additional fraud-related topics, Treasury and FinCEN do not believe
institutions should be ‘‘risk-based,
including an FTA on fraud schemes that an examiner should substitute his
including ensuring that more attention
targeting digital identities, mail theft- or her own subjective judgment in place
and resources of financial institutions
related check fraud, and elder financial of the financial institution, examiners
should be directed toward higher-risk
exploitation.72 More recently, FinCEN will be expected to assess whether: (1)
customers and activities, consistent
issued an Alert on Fraud Rings and their a financial institution’s resource
with the risk profile of a financial
Exploitation of Federal Child Nutrition allocation decisions are informed by,
programs in Minnesota given the institution, rather than toward lower-
and consistent with, reasonably
rampant financial fraud and improper risk customers and activities.’’ 74
designed risk assessment processes; and
payments in Minnesota.73 As noted in Proposed 31 CFR 10XX.210(b)(1)(ii)
(2) with respect to implementation,
the alert, ongoing investigations into would adopt this formulation as part of
specifically, whether the financial
fraudsters in Minnesota by the U.S. a financial institution’s obligation to
institution knows or should know of
Department of Justice have identified establish a risk-based set of internal
resource-related issues involving its
potentially billions of dollars stolen policies, procedures, and controls. internal policies, procedures, and
from the Federal child nutrition Under the proposed rule, a financial controls and other mandatory elements
programs and other Federal and State institution’s efforts to mitigate its ML/ that may result in the financial
government benefits programs, TF risks would involve ‘‘directing more institution failing to implement its
including Medicaid. attention and resources toward higher- AML/CFT program in all material
FinCEN requests comment from the risk customers and activities, consistent respects and failing to address such
public on whether additional guidance with the risk profile of the [financial issues.
related to the consideration of the AML/ institution], rather than toward lower-
CFT Priorities as part of an institution’s risk customers and activities.’’ iii. Proposed 31 CFR 1020.210(b)(1)(iii),
risk assessment processes would be FinCEN views risk-based allocation of 1023.210(b)(1)(iii), 1024.210(b)(1)(iii),
warranted. resources as a critical step in realizing 1026.210(b)(1)(iii), and
the AML Act’s BSA modernization and 1028.210(b)(1)(iii)—Conduct Ongoing
c. Proposed 31 CFR reform ambitions, and an important Customer Due Diligence
10XX.210(b)(1)(i)(C)—Updates to Risk departure from the status quo of AML/ The existing program rules for certain
Assessment Processes CFT compliance and supervision. The financial institutions, referred to here as
Proposed 31 CFR 10XX.210(b)(1)(i)(C) proposed rule envisions financial covered financial institutions, contain
would require financial institutions to institutions exercising more flexibility CDD requirements that have commonly
update their risk assessment processes in deploying attention and resources in been referred to as the ‘‘fifth pillar’’ of
promptly upon any change that the accordance with the proposed rule AML program rules for those types of
financial institution knows or has without fear of supervisory criticism or financial institutions.75 Under these
reason to know significantly changes action from examiners for directing requirements, covered financial
their ML/TF risk profiles. For example, more attention and resources on higher institutions must establish and maintain
a financial institution may need to risk customers and activities rather than a written AML program that includes:
update its risk assessment when new toward lower risk customers and ‘‘appropriate risk-based procedures for
products, services, and customer types activities. conducting ongoing customer due
are introduced; if existing products, The goal of risk-based resource diligence, to include, but not be limited
services, and customer types undergo allocation is for financial institutions to to: understanding the nature and
significant changes; when the financial spend less time, energy, and resources purpose of customer relationships for
institution adopts new risk mitigation on lower priority activities that may the purpose of developing a customer
technology; or if the financial institution result in fewer resources devoted to, and risk profile; and conducting ongoing
as a whole expands or contracts through potentially distract from, more serious monitoring to identify and report
mergers, acquisitions, divestitures, threats. The proposed rule would thus suspicious transactions and, on a risk
dissolutions, and liquidations. Financial enable financial institutions to focus basis, to maintain and update customer
institutions may also need to update more on higher risk customers and information.’’
their risk assessment processes based on activities, which FinCEN has Proposed 31 CFR 1020.210(b)(1)(iii),
factors external to their operations that determined should result in financial 1023.210(b)(1)(iii), 1024.210(b)(1)(iii),
they know or have reason to know institutions being more effective at 1026.210(b)(1)(iii), and
significantly change their ML/TF risk detecting, reporting, and preventing the 1028.210(b)(1)(iii) would retain these
profiles. FinCEN welcomes comments flow of illicit funds and providing law ongoing CDD obligations without
on whether it should further clarify enforcement with more valuable BSA alteration but would make them part of
when financial institutions must review reporting. the requirement that covered financial
or update their risk assessment As noted above, Treasury and FinCEN institutions establish a risk-based set of
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processes. believe that financial institutions are internal policies, procedures, and
best positioned to identify and evaluate controls that is reasonably designed.
72 FinCEN, Financial Trend Analyses, https:// their ML/TF risks and to make decisions
www.fincen.gov/resources/financial-trend-analyses. related to risk identification and 75 See applicable program rules with CDD
73 FinCEN, FinCEN Alert on Fraud Rings and requirements for covered financial institutions
resource allocation in accordance with
their Exploitation of Federal Child Nutrition located at 31 CFR 1020.210(a)(2)(v) and (b)(2)(v)
programs in Minnesota, (Jan. 9, 2026), https:// risk identification. The proposed rule, (banks); 1023.210(b)(5) (broker-dealers);
www.fincen.gov/system/files/2026-01/FinCEN- 1024.210(b)(5) (mutual funds); and 1026.210(b)(5)
Alert-Federal-Child-Nutrition-Programs.pdf. 74 31 U.S.C. 5318(h)(2)(B)(iv)(II). (FCMs and IBCs).
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18718 Federal Register / Vol. 91, No. 69 / Friday, April 10, 2026 / Proposed Rules
FinCEN proposes this organizational meaningful information relevant to CFT program, independent testing
change because the activities required identifying, assessing, and mitigating should be based on objective criteria
by the CDD pillar are, in practice, ML/TF risks. Familiarity with local designed to assess whether a financial
subsumed by the obligation for a businesses, direct interaction between institution has established and
covered financial institution to have a bank staff and customers, and an maintained an effective AML/CFT
risk-based set of internal policies, understanding of ordinary patterns of program and allocated resources
procedures, and controls that is activity within the bank’s community consistent with its risk assessment
reasonably designed. The organizational may appropriately inform the bank’s processes. These criteria should also
change more accurately reflects how risk assessment processes and the assess whether related program
covered financial institutions design of reasonably designed internal governance is sufficient to manage risks
operationalize such ongoing customer policies, procedures, and controls. and apply compensating controls where
due diligence as part of their overall While such characteristics do not necessary, particularly in areas where
AML programs. This organizational reduce a community bank’s obligation remediation is underway. This
change, however, is not intended to to establish and maintain an effective evaluation helps to inform the financial
have any substantive effect on existing AML/CFT program in accordance with institution’s senior management of
obligations under 31 CFR 1010.230. the proposed rule, they may influence weaknesses or areas in need of
how a community bank documents its enhancement or stronger controls.
iv. Application to Community Banks
ML/TF risks and allocates attention and Typically, this evaluation includes a
FinCEN recognizes that financial resources consistent with those risks. conclusion about the financial
institutions vary significantly in size, Further, under the proposed rule’s institution’s overall compliance with
structure, complexity, and risk profile. requirement that a financial institution AML/CFT statutory and regulatory
Under the proposed rule, the level of review and, as appropriate, incorporate requirements and sufficient information
sophistication of a financial institution’s the AML/CFT Priorities, a community for the reviewer (e.g., board of directors,
internal policies, procedures, and bank may determine, based on its risk senior management, AML/CFT officer,
controls—including its risk assessment assessment processes, that certain AML/ outside auditor, or an examiner) to
processes—should be commensurate CFT Priorities may not be applicable to reach a conclusion about whether the
with the financial institution’s size, its business activities. In such cases, the risk-based set of internal policies,
structure, risk profile, and complexity. community bank would not be required procedures, and controls is reasonably
Accordingly, financial institutions with to allocate attention or resources to risks designed and resources are well-
broader product offerings, more for which it has no identified exposure. allocated consistent with the
complex corporate structures, or greater Rather, the bank would be expected to institution’s risk assessment processes.
exposure to higher-risk customers, direct its attention and resources in a Additionally, while financial
products, services, or geographic manner consistent with its documented institutions retain some flexibility
locations would be expected to establish ML/TF risks. regarding who conducts the audit or
correspondingly more formalized or testing, the proposed rule would
analytically complex internal policies, 2. Proposed 31 CFR 10XX.210(b)(2)— continue to require that testing be
procedures, and controls—including Independent Testing independent. Financial institutions that
risk assessment processes. By contrast, The AML Act did not change the BSA do not employ outside auditors or
many community banks operate with requirement that each financial consultants or that do not have internal
more limited business activities, institution include ‘‘an independent audit departments may comply with
traditional lending and deposit services, audit function to test programs,’’ 76 this requirement by using internal staff
a narrower geographic footprint, and which is already reflected in AML/CFT who are not involved in the function
customer bases concentrated within program rule requirements,77 and being tested. For these financial
defined local communities. For such proposed 31 CFR 10XX.210(b)(2). The institutions and financial institutions
banks, risk assessment processes may purpose of independent testing is to with other types of arrangements for
appropriately be more streamlined or assess the financial institution’s independent testing, the AML/CFT
qualitative in nature, and a risk-based compliance with AML/CFT statutory officer or any party who directly, and in
set of internal policies, procedures, and and regulatory requirements, relative to some cases, indirectly reports to the
controls that is reasonably designed for its risk profile. The independent AML/ AML/CFT officer, or an equivalent role,
a large, complex financial organization CFT program testing should be focused would generally not be considered
would not necessarily be required or on whether the AML/CFT program is sufficiently independent.78 Any
appropriate for a community bank with effective, and it should identify issues
a more limited risk profile. and areas for remediation accordingly.
78 This is consistent with current 31 CFR
The proposed rule does not prescribe 1022.210, which provides that independent testing
Similar to the expectations outlined review may be conducted by an officer or employee
any specific methodology for
above for examiners, Treasury and of the MSB so long as the tester is not the AML/
identifying, assessing, and documenting CFT officer. Similarly, current 31 CFR 1025.210,
FinCEN do not believe that an auditor
ML/TF risks. Community banks may use 1029.210, and 1030.210 provide that independent
should substitute his or her own
risk assessment processes that are testing at insurance companies, loan or finance
subjective judgment in place of the companies, and housing GSEs, respectively, may be
tailored to their business model and
financial institution. To support the conducted by a third party or by any officer or
operational scale, including processes employee of the financial institution, other than the
effective implementation of an AML/
that rely on direct knowledge of AML/CFT officer. Likewise, 31 CFR 1027.210(b)(4)
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products, services, customers, and 76 31 U.S.C. 5318(h)(1)(D).
and 1028.210(b)(4) provide that independent testing
geographic locations rather than highly of a DPMSJ or an operator of a credit card system,
77 See 31 CFR 1020.210(a)(2)(ii), (b)(2)(ii) (banks);
respectively, can be conducted by an officer or
parameterized or model-driven 1021.210(b)(2)(ii) (casinos); 1022.210(d)(4) (MSBs); employee of the institution, so long as the tester is
approaches. Many community banks 1023.210(b)(2) (broker-dealers); 1024.210(b)(2) not the AML/CFT officer or a person involved in
maintain longstanding customer (mutual funds); 1025.210(b)(4) (insurance the operation of the AML/CFT program.
companies); 1026.210(b)(2) (FCMs and IBCs); Determining whether testing at U.S. operations of
relationships and operate within 1027.210(b)(4) (DPMSJs); 1028.210(b)(4) (operators foreign financial institutions is adequately
defined local markets, which may of a credit card system); 1029.210(b)(4) (loan or ‘‘independent’’ may include a review of the
provide bank personnel with finance companies); 1030.210(b)(4) (housing GSEs). reporting arrangements between the party
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Federal Register / Vol. 91, No. 69 / Friday, April 10, 2026 / Proposed Rules 18719
individual conducting the testing, 3. Proposed 31 CFR 10XX.210(b)(3)— adversely impact the officer’s ability to
whether internal or external, would be Designate an AML/CFT Officer Located effectively coordinate and monitor day-
required to be independent of other in the United States to-day AML/CFT compliance generally
parts of the financial institution’s AML/ i. Duties of the AML/CFT Officer would not fulfill this requirement. The
CFT program, including its oversight. addition of the explicit requirement that
The BSA requires that financial the AML/CFT officer be responsible for
For financial institutions that engage
institutions with AML/CFT program ‘‘establishing and implementing the
outside auditors or consultants, the obligations must have a designated
financial institution would be required AML/CFT program’’ in the proposed
compliance officer. While FinCEN has rule would make explicit a long-
to ensure that the outside parties adopted this obligation—commonly
conducting the independent testing are standing supervisory expectation, rather
referred to as the BSA/AML officer—in than changing current supervisory or
not involved in functions related to the existing guidance and regulations, the regulatory requirements or expectations.
AML/CFT program at the financial program rules use slight variations in To promote consistency and reduce
institution that may present a conflict of the specific language to describe this redundancy, the proposed rule would
interest or lack of independence, such requirement for different types of remove some examples of what it means
as AML/CFT training or the financial institutions. The proposed rule to coordinate and monitor day-to-day
development or enhancement of provides technical changes to promote compliance with AML/CFT
internal policies, procedures, and clarity and consistency. requirements that are currently listed in
controls. Additionally, for the purposes As in the current program rules, the AML program rules for MSBs;
of the independent testing component, proposed 31 CFR 10XX.210(b)(3) would insurance companies; DPMSJs;
outside parties would not include provide that an AML/CFT program must operators of credit card systems; loan or
government agencies, entities, or designate an individual (referred to as
finance companies; and housing GSEs.81
instrumentalities, such as a financial an AML/CFT officer) responsible for
For example, those AML program rules
establishing and implementing the
institution’s Federal or State functional currently provide that an AML/CFT
AML/CFT program and coordinating
regulators. Financial institutions with officer is responsible for updating the
and monitoring day-to-day compliance
less complex operations, and lower risk financial institution’s AML program and
with the requirements and prohibitions
profiles may consider utilizing a shared ensuring that employees are educated or
of the BSA and FinCEN’s implementing
resource as part of a collaborative trained in accordance with the financial
regulations. FinCEN’s view is that the
arrangement to conduct testing, as long institution’s AML program training
individual serving as the AML/CFT
as the testing is independent.79 obligation. Removing this type of
officer must be qualified for that role
language in the proposed rule does not
While all financial institutions are and not overburdened with other
indicate that an AML/CFT officer is not
required under existing regulations to responsibilities at the institution.
The proposed rule is not intended to responsible for these activities, but
establish independent testing, FinCEN rather reflects that such examples in the
is standardizing this requirement across be primarily concerned with the formal
title of the individual responsible for regulatory text are not necessary, and
all financial institution types. For that each financial institution should
example, the current rules for broker- establishing and implementing the
AML/CFT program and coordinating decide for itself the specific activities
dealers, mutual funds, and FCMs and that an AML/CFT officer should
IBCs require outside parties conducting and monitoring day-to-day compliance;
instead, the proposed rule focuses on undertake to establish, maintain, and
the independent testing to be implement an AML/CFT program.
the AML/CFT officer’s position in the
qualified; 80 however, FinCEN does not Likewise, the proposed rule would
financial institution’s organizational
find it necessary to add this ‘‘qualified’’ remove unnecessary provisions in
structure that enables the AML/CFT
description as it does not establish a certain current program rules—those
officer to effectively establish and
new substantive requirement. FinCEN applicable to DPMSJs; operators of
implement the financial institution’s
would generally expect, as with the credit card systems; loan or finance
AML/CFT program. The AML/CFT
AML/CFT officer component, companies; and housing GSEs—
officer’s authority, independence, and
independent testers to have the requiring AML/CFT officers to ensure
access to resources within the financial
expertise and experience necessary to that a financial institution’s AML/CFT
institution are critical. An AML/CFT
perform such testing effectively, program is implemented effectively.82
officer should have decision-making
including having sufficient knowledge That expectation is embedded in the
capability regarding the AML/CFT
of the financial institution’s risk profile proposed rule’s requirement that AML/
program and sufficient functional
and AML/CFT laws and regulations. CFT officers coordinate and monitor
stature within the organization to ensure
day-to-day compliance.
that the program meets BSA
Similarly, the proposed rule would
requirements.
delete an unnecessary reference from
The AML/CFT officer’s access to
conducting the independent testing and the AML/ current 31 CFR 1022.210(d)(2)(i). That
CFT officer, or equivalent management function resources may include the following:
provision provides that an MSB’s AML/
such as a head of business line or a general adequate compliance funds and staffing
CFT officer must ensure that the MSB
manager, to assess any conflicts of interests and the with the skills and expertise appropriate
properly files reports, and creates and
level of independence with the party conducting to the financial institution’s risk profile,
retains records, in accordance with the
the independent testing. size, and complexity; an organizational
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79 See FRB, FDIC, NCUA, OCC and FinCEN,
structure that supports compliance and 81 See 31 CFR 1022.210(d)(2) (MSBs);
Interagency Statement on Sharing Bank Secrecy Act effectiveness; and sufficient technology
Resources (Oct. 3, 2018), https://www.fincen.gov/ 1025.210(b)(2) (insurance companies);
and systems to support the timely 1027.210(b)(2) (DPMSJs); 1028.210(b)(2) (operators
news/news-releases/interagency-statement-sharing-
bank-secrecy-act-resources.
identification, measurement, of credit card systems); 1029.210(b)(2) (loan or
monitoring, reporting, and management finance companies); 1030.210(b)(2) (housing GSEs).
80 See applicable program rules located at 31 CFR
82 See 31 CFR 1027.210(b)(2)(i) (DPMSJs);
1023.210(b)(2) (broker-dealers); 1024.210(b)(2) of the financial institution’s ML/TF 1028.210(b)(2)(i) (operators of credit card systems);
(mutual funds); and 1026.210(b)(2) (FCMs and risks. An AML/CFT officer with 1029.210(b)(2)(i) (loan or finance companies);
IBCs). conflicting responsibilities that 1030.210(b)(2)(i) (housing GSEs).
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18720 Federal Register / Vol. 91, No. 69 / Friday, April 10, 2026 / Proposed Rules
BSA. These activities are and remain any further clarifications on this point Proposed 31 CFR 10XX.210(d) would
part of the AML/CFT officer’s duty to would be useful. provide a consistent standard by
monitor and coordinate day-to-day requiring that an AML/CFT program be
4. Proposed 31 CFR 10XX.210(b)(4)—
compliance, and thus it is not necessary written, and that a financial institution,
Ongoing Employee Training Program
to separately list them in the rule. This upon request, make available a copy of
deletion and the removal of the other The BSA requires AML/CFT programs its written AML/CFT program to
redundant references will ensure to include an ‘‘ongoing employee FinCEN or its designee. FinCEN’s
consistent language across program training program.’’ 85 This statutory designee, in this instance, includes any
rules. requirement is reflected in all current agency to which FinCEN has delegated
AML program rules, but in different examination authority or the
ii. Proposed 31 CFR 10XX.210(b)(3)— formulations.86 Proposed 31 CFR appropriate SRO. It is thus assured that
The AML/CFT Officer Must Be Located 10XX.210(b)(4) would eliminate agencies with original or delegated
in the United States and Accessible to inconsistency in the AML program examination authority over a financial
Regulators rules’ training requirement by adopting institution, including for example an
the BSA’s ‘‘ongoing employee training agency with examination authorities
The AML Act provides that the duty
program’’ language uniformly. This delegated by FinCEN 88 or the
to establish, maintain, and enforce a
change is clarifying, not substantive. appropriate SRO 89 will be among the
financial institution’s AML/CFT
FinCEN would generally expect agencies able to access a financial
program shall remain the responsibility
training to cover the financial institution’s written AML/CFT program.
of, and be performed by, persons in the
institution’s internal policies, In addition to promoting consistency
United States who are accessible to, and procedures, and controls, which should across the program rules, these
subject to oversight and supervision by, in turn reflect the results of the financial clarifications are intended to help
the Secretary and the appropriate institution’s risk assessment processes, financial institutions develop a
Federal functional regulator.83 Proposed the latest AML/CFT regulatory structured AML/CFT program
31 CFR 10XX.210(b)(3) therefore requirements, and other relevant understood across the enterprise.
requires the very same, noting that the information. The frequency with which
designated individual must be the training would occur, and the 2. Proposed 31 CFR 10XX.210(d)—
accessible to, and subject to oversight content of the training, would depend Financial Institution Approval of a
and supervision by, FinCEN and its on the financial institution’s ML/TF risk Written AML/CFT Program
designee. FinCEN’s designee, in this profile and the roles and responsibilities Proposed 31 CFR 10XX.210(d) would
instance, includes any agency to which of the persons receiving the training. also require that a financial institution’s
FinCEN has delegated examination FinCEN welcomes comment on whether written AML/CFT program be approved
authority or the appropriate SRO. any further clarifications of the by the financial institution’s board of
FinCEN recognizes financial proposed training requirement are directors or an equivalent governing
institutions may currently have AML/ needed. FinCEN recognizes that body within the financial institution, or
CFT staff and operations outside of the financial institutions may have appropriate senior management.
United States, or they may contract out employees and non-employees who may Current program rules generally
or delegate parts of their AML/CFT have a variety of roles and require a financial institution’s board or
operations to third-party providers responsibilities in relation to the AML/ an equivalent governing body within the
located outside of the United States. CFT program. The risk-based nature of institution, or appropriate senior
These arrangements may serve to an AML/CFT program provides management, to approve the financial
improve cost efficiencies, to enhance flexibility for financial institutions to institution’s written AML program.
coordination, particularly with respect identify both employees and non- However, the proposed rule
to cross-border operations, or serve employees who must be trained on an
other purposes not in conflict with goals ongoing basis. maintain, and make available a written anti-money
underlying the BSA. Consequently, laundering program. Banks with a Federal
under the proposed rule, while the E. Access to and Approval of a Written functional regulator are required to have written
AML/CFT Program anti-money laundering programs under the
AML/CFT officer must be located in the regulators’ existing rules. See 12 CFR 21.21(c)(1),
United States, personnel located outside 1. Proposed 31 CFR 10XX.210(d)— 208.63(b)(1), 326.8(b)(1), 748.2(b)(1). The current
of the United States would still be Written AML/CFT Programs Must Be program rules require other types of financial
institutions to have written programs at 31 CFR
permitted to perform certain AML/CFT Made Available Upon Request 1021.210(b)(1) (casinos); 1022.210(c) (MSBs);
functions. This language does not alter 1023.210 (broker-dealers); 1024.210(a) (mutual
Current program rules generally
existing regulations and guidance that funds); 1025.210(a) (insurance companies);
require financial institutions to have 1026.210 (FCMs and IBCs); 1027.210(a)(1)
generally prohibit the sharing of SARs
written AML/CFT programs, but there is (DPMSJs); 1028.210(a) (operators of credit card
with personnel located outside of the
variation in how the requirement is systems); 1029.210(a) (loan or finance companies);
United States other than in limited 1030.210(a) (housing GSEs).
formulated in FinCEN’s regulations for
circumstances such as a bank’s foreign 88 See 31 CFR 1010.810(b) (FinCEN’s delegation
certain types of financial institutions.87
head office or controlling company.84 of ‘‘[a]uthority to examine institutions to determine
FinCEN requests comment on whether compliance with the requirements of this chapter’’).
85 31 U.S.C. 5318(h)(1)(C). 89 For broker-dealers, FinCEN recognizes the SEC
86 See 31 CFR 1020.210(a)(2)(iv), (b)(2)(iv)
as the relevant Federal functional regulator. See id.
83 31 U.S.C. 5318(h)(5). (banks); 1021.210(b)(2)(iii) (casinos); 1022.210(d)(3) 1010.810(b)(6) (delegating examination authority to
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84 See, e.g., FinCEN, Financial Crimes (MSBs); 1023.210(b)(4) (broker-dealers); SEC for broker-dealers). FinCEN recognizes
Enforcement Network; Confidentiality of Suspicious 1024.210(b)(4) (mutual funds); 1025.210(b)(3) registered national securities exchanges or a
Activity Reports, 75 FR 75593 (Dec. 3, 2010); see (insurance companies); 1026.210(b)(4) (FCMs and national securities association, such as the
also FinCEN, FRB, FDIC, OCC, and Office of Thrift IBCs); 1027.210(b)(3) (DPMSJs); 1028.210(b)(3) Financial Industry Regulatory Authority (FINRA),
Supervision, Interagency Guidance on Sharing (operators of credit card systems); 1029.210(b)(3) as the relevant SROs for member broker-dealers.
Suspicious Activity Reports with Head Offices and (loan or finance companies); 1030.210(b)(3) Similarly, for FCMs and IBCs, FinCEN recognizes
Controlling Companies (Jan. 20, 2006), https:// (housing GSEs). the CFTC as the relevant Federal functional
www.fincen.gov/system/files/guidance/sarsharing 87 Current 31 CFR 1020.210(b) requires banks regulator, 31 CFR 1010.810(b)(9), and the National
guidance01122006.pdf. lacking a Federal functional regulator to establish, Futures Association (NFA) as the SRO.
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Federal Register / Vol. 91, No. 69 / Friday, April 10, 2026 / Proposed Rules 18721
standardizes this language across all within the bank.91 Banks with a Federal to these principles is critical to ensuring
financial institution types and provides functional regulator must also have that AML/CFT programs are effective.
financial institutions with significant board approval for their AML/CFT At the same time, an alternative
flexibility in its chosen approval programs under their regulators’ approach is to refrain from prescribing
method. While some financial existing rules, although not FinCEN’s.92 corporate-governance detail in the
institutions may choose to have their On the other hand, broker-dealers; proposed rule, instead allowing
boards approve the written AML/CFT insurance companies; FCMs and IBCs; financial institutions to determine the
program, for others, an equivalent DPMSJs; operators of credit card appropriate approving authority
governing body might be a sole systems; loan or finance companies; and consistent with their legal structure and
proprietor, general partner, or trustee, or housing GSEs, must currently obtain other regulatory and legal requirements.
a grouping of owners, senior officers senior management level approval for Leaving firm-level choices to financial
(including board committees or other their AML/CFT programs.93 Board institutions would preserve flexibility
groups with oversight responsibilities), approval is not required for these across differing corporate structures,
senior management, or other persons entities currently, so the proposed rule avoid imposing a single model for
having functions and authority similar would not be a change. The existing allocating responsibilities, and reduce
to that of a board. For the U.S. branch program rules for casinos and MSBs do the risk of unintended conflict with
of a foreign bank, the equivalent not contain specific board or senior other regulatory or legal requirements.
governing body may be the foreign management approval requirements, so F. Proposed 31 CFR 1020.221—
banking organization’s board of the proposed rule would constitute a Supervision and Enforcement
directors or delegates acting under the change for these entities.94
In the case of some financial The proposed rule would add new 31
board’s express authority.90
institutions, there may be existing CFR 1020.221 to set forth a supervision
Alternatively, some financial statutes or regulations (other than the and enforcement framework for banks’
institutions might have other BSA and its implementing regulations) AML/CFT programs that is aligned with
individuals or groups with similar that will determine whether a financial the AML Act’s emphasis on
status or functions as directors approve institution must have its board approve effectiveness and risk-based
the AML/CFT program. Such its AML/CFT program. The proposed supervision. The proposed section
individuals may include Chief rule would not interfere with any such defines key terms, describes FinCEN’s
Executive Officer, Chief Financial requirements. For instance, mutual enforcement and supervision policy
Officer, Chief Operations Officer, Chief funds must comply with Rule 38a–1 with respect to the requirements of the
Legal Officer, Chief Compliance Officer, under the Investment Company Act of BSA or 31 CFR chapter X, establishes
Director, and individuals with similar 1940 requiring board approval of a consultation requirements between
status or functions. Also, groups with mutual fund’s written policies and FinCEN and the Agencies, when acting
oversight responsibilities may include procedures, which would include its under supervisory authority delegated
board committees such as compliance or AML/CFT Program.95 Because of this by FinCEN, and specifies factors that the
audit committees as well as a group of requirement, FinCEN understands that Director would consider in determining
some, or all of these individuals with Rule 38a–1 would be controlling in whether to take, or in reviewing, an
aforementioned titles, as senior practice and require a mutual fund’s AML/CFT enforcement action or
management that can provide effective board to approve its AML/CFT program; significant AML/CFT supervisory
oversight of the AML/CFT program to needless to say, such approval would action. The supervision and
comply with the proposed rule. also satisfy FinCEN’s proposed rule. enforcement requirements apply only to
Although some financial institutions The proposed rule’s provision banks and the Agencies in the proposed
must already obtain board approval for requiring the approval of the AML/CFT rule, but FinCEN welcomes comment on
their AML/CFT programs or be subject program by a financial institution’s whether these provisions should apply
to oversight by a board of directors, or board of directors, equivalent body, or to other financial institutions. Likewise,
an equivalent governing body, this appropriate senior management reflects the enforcement requirements do not
board or senior management approval the importance of a financial institution apply to and in no way affect criminal
requirement will represent a change in maintaining a strong culture of enforcement liability under the Bank
requirements for other financial compliance. A culture of compliance Secrecy Act.
institutions. In some cases, the proposed involves demonstrable support and
visible commitment from leadership, 1. Proposed 31 CFR 1020.221(a)—
rule would provide greater flexibility Definitions
than current program rules provide. For the dedication of adequate resources to
example, a bank lacking a Federal AML/CFT compliance, effective Proposed 31 CFR 1020.221(a) would
functional regulator must have an AML/ information sharing throughout the define several terms used throughout
CFT program that is approved by the financial institution, qualified and the section. The term ‘‘AML/CFT
board or equivalent governing body independent testing, and understanding requirement’’ would mean a
across leadership and staff levels of the requirement of the BSA or 31 CFR
90 The FRB, FDIC, and OCC each require the U.S.
importance of BSA reports. Adherence chapter X.
branches, agencies, and representative offices of the The term ‘‘AML/CFT enforcement
foreign banks they supervise operating in the
91 See 31 CFR 1020.210(b)(3) (banks lacking a
action’’ as proposed in 31 CFR
United States to develop written BSA compliance Federal functional regulator). 1020.211(a)(1) would mean any formal
92 See 12 CFR 21.21(c)(1), 208.63(b)(1),
programs that are approved by their respective
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326.8(b)(1), 748.2(b)(1).
or informal action taken by FinCEN that
bank’s board and noted in the minutes, or that are
approved by delegates acting under the express 93 See 31 CFR 1023.210 (broker-dealers); seeks to penalize, remedy, prevent, or
authority of their respective bank’s board to 1025.210(a) (insurance companies); 1026.210 (FCMs respond to noncompliance with, past or
approve the BSA compliance programs. See and IBCs); 1027.210(a)(1) (DPMSJs); 1028.210(a) ongoing violations of, or past or ongoing
208.63(b)(1), 12 CFR 21.21(c)(1), 326.8(b)(1), and (operators of credit card systems); 1029.210(a) (loan
or finance companies); 1030.210(a) (housing GSEs).
deficiencies relating to, an AML/CFT
748.2(b)(1). ‘‘Express authority’’ means the head
office must be aware of its U.S. AML program 94 See applicable AML program rules located at requirement.
requirements and there must be some indication of 31 CFR 1021.210 (casinos) and 1022.210 (MSBs). The term ‘‘significant AML/CFT
purposeful delegation. 95 See 17 CFR 270.38a–1(a)(2). supervisory action’’ as proposed in 31
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18722 Federal Register / Vol. 91, No. 69 / Friday, April 10, 2026 / Proposed Rules
CFR 1020.221(a)(3) would mean any 3. 31 CFR 1020.221(c)—FinCEN or performing other innovative activities
written communication or other formal Consultation producing demonstrable outputs
supervisory determination issued by Proposed 31 CFR 1020.221(c) would evincing the effectiveness of the bank’s
FinCEN or an Agency, when acting establish a notice and consultation AML/CFT program (including effective
under supervisory authority delegated framework applicable when the use of artificial intelligence, federated
by FinCEN, that identifies one or more Agencies, acting under supervisory learning, or other advanced monitoring
alleged deficiencies, weaknesses, authority delegated by FinCEN, intend tools); and any other factor the Director
violations of law, or unsafe or unsound to initiate a significant AML/CFT deems appropriate, including the bank’s
practices or conditions relating to an supervisory action. Before initiating size, complexity, and risk profile, and,
AML/CFT requirement; communicates such an action, the Agencies would be as relevant, circumstances in which the
supervisory expectations regarding required to provide the Director with an bank’s low-risk customers or limited
actions or remedial measures required opportunity to review the action and business activities naturally limit the
to correct the issue; and contemplates consider any input offered by the extent to which the bank can
significant or programmatic actions or Director, which may include any view meaningfully contribute to AML/CFT
remedial measures to be taken by the Priorities.
as to the effectiveness of the bank’s
The Director’s consideration of the
bank. Examiner observations, AML/CFT program. To facilitate that
extent to which a bank has provided
suggestions, or other informal comments review, the Agencies would be required highly useful information to law
would be expressly excluded from this to provide written notice to the Director enforcement or national security
definition. of their intent to take the action at least agencies reflects that FinCEN considers
30 days in advance of the proposed information sharing to be an important
2. Proposed 31 CFR 1020.221(b)— action, unless a shorter period is
FinCEN Enforcement and Supervision element of an effective AML/CFT
necessary, in the sole discretion of the program. Financial institutions may
Policy Agencies, to remedy, prevent, or share useful information by responding
Proposed 31 CFR 1020.221(b) would respond to an unsafe or unsound to 314(a) requests or may use 314(b)
articulate FinCEN’s enforcement and practice or condition. authorities to share information with
The notice would be accompanied by other financial institutions to identify
supervision policy as it relates to AML/
the relevant AML/CFT information and report to the Federal Government
CFT requirements applicable to banks.96
underlying the proposed action. activities that may involve ML/TF.
Except with respect to a significant or
Relevant AML/CFT information may Financial institutions may also elect to
systemic failure to implement an include, but is not limited to: the
effective AML/CFT program (i.e., participate in the FinCEN Exchange
relevant portions of the draft report Program, a voluntary public-private
deficiencies or issues that arise from enforcement action; the relevant
failing to implement, in all material information sharing partnership among
examination workpapers supporting the FinCEN, law enforcement agencies,
respects, a properly established AML/ proposed action and the relevant AML/
CFT program), a bank that has properly national security agencies, and financial
CFT information submitted by the bank institutions and other private sector
established an AML/CFT program to the Agency. FinCEN notes the
would not be subject to an AML/CFT entities that aims to support priority
Agencies would not be obligated to national security and counter-illicit
enforcement action based on the provide information over which the
program rule by FinCEN or to a finance objectives.99 FinCEN strongly
bank may claim privilege under Federal encourages information sharing for the
significant AML/CFT supervisory action or State law. The Agencies would also
based on the program rule by FinCEN or purpose of advancing the AML/CFT
be required to respond to requests for Priorities.
by the Agencies, when acting under additional AML/CFT information from The Director may consider the above
supervisory authority delegated by the Director regarding the proposed alongside other factors, including those
FinCEN. action. outlined in the FinCEN Statement on
At the same time, the proposed rule Enforcement of the Bank Secrecy Act,
4. 31 CFR 1020.221(d)—FinCEN
would clarify that nothing in this policy such as the nature and seriousness of
Considerations
would restrict an AML/CFT violations, including the extent of
enforcement action or a significant Proposed 31 CFR 1020.221(d) possible harm to the public and
AML/CFT supervisory action with specifies the factors that the Director amounts involved; impact or harm of
respect to a failure to properly establish would consider in determining whether the violations on FinCEN’s mission to
an AML/CFT program. Moreover, the to take an enforcement action or safeguard the financial system from
proposed rule would not affect the significant supervisory action with illicit use, combat money laundering,
factors that FinCEN applies in the respect to banks, or when reviewing a and promote national security; or
disposition of a violation 97 once proposed action by the Agencies.98 financial gain or other benefit resulting
FinCEN has determined that such These factors would include the factors from, or attributable to, the violations,
violation involves either: (1) a failure to set forth in 31 U.S.C. 5318(h)(2)(B), as amongst others.100
properly establish an AML/CFT applicable; the extent, if any, to which
the bank—where appropriate in light of G. Other Changes for Modernization,
program, or (2) a significant or systemic
its size, complexity, and risk profile— Clarification, and Consistency
failure to implement an effective AML/
CFT program. has advanced the AML/CFT Priorities In addition to the previously
by providing highly useful information
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described changes, the proposed rule
96 The proposal is not intended to and does not
to law enforcement or national security would make other revisions to increase
affect criminal enforcement liability under the BSA, officials, conducting proactive analytics
or the related authority of the Department of Justice. 99 FinCEN, FinCEN Exchange, https://
97 FinCEN, FinCEN Statement on Enforcement of 98 This includes when the Agencies are www.fincen.gov/resources/fincen-exchange.
the Bank Secrecy Act (Aug. 18, 2020), at pp. 2–3, consulting with FinCEN as required under the 100 FinCEN, FinCEN Statement on Enforcement of
https://www.fincen.gov/system/files/shared/ proposed rule, or under a consultation requirement the Bank Secrecy Act (Aug. 18, 2020), https://
FinCEN%20Enforcement%20Statement_ they have imposed on themselves (which may www.fincen.gov/system/files/shared/FinCEN%20
FINAL%20508.pdf. include enforcement actions). Enforcement%20Statement_FINAL%20508.pdf.
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Federal Register / Vol. 91, No. 69 / Friday, April 10, 2026 / Proposed Rules 18723
clarity and consistency in the program As the delegated administrator of the 2. Conforming and Modernizing
rules. Most of these changes are BSA, FinCEN expects banks to adhere to Program Rules
technical, such as renumbering FinCEN’s rule as promulgated via the For purposes of consistency and
provisions, amending cross-references, Secretary’s explicit authority to clarity, the proposed rule would
and updating statutory references based prescribe minimum standards for AML/ harmonize certain elements, as
on changes to the BSA by the AML Act. CFT programs. described below, of the program rules
For example, along with the Agencies, The proposed rules for broker-dealers for casinos and MSBs to the program
references to ‘‘BSA/AML programs’’ are and FCMs and IBCs would retain rules for banks; broker-dealers; mutual
being updated to ‘‘AML/CFT programs’’ requirements to comply with the rules, funds; insurance companies; FCMs and
for financial institutions subject to CIP regulations, or requirements of their IBCs; DPMSJs; operators of credit card
requirements.101 These technical SROs, provided those rules, regulations, systems; loan or finance companies; and
changes are not anticipated to establish or requirements have been made housing GSEs.
new obligations. effective under the Securities Exchange Additionally, for casinos, the
The proposed rule also would make Act of 1934 for broker-dealers,104 or the proposed rule would remove the
minor changes to the definitions in Commodity Exchange Act for FCMs and
FinCEN regulations, including the following language in 31 CFR
IBCs,105 or by the appropriate Federal 1021.210(b)(2)(vi): ‘‘For casinos that
definition of ‘‘Bank Secrecy Act’’ at 31 functional regulator in consultation
CFR 1010.100(e).102 The proposed rule have automated data processing
with FinCEN. systems, the use of automated programs
would also amend the definition of The following subsections describe
‘‘Federal functional regulator’’ at to aid in assuring compliance.’’
more significant changes. Similarly, for MSBs, the proposed rule
§ 1010.100(r) to remove reference to the
defunct Office of Thrift Supervision and 1. Combining the Bank Rules would remove the following language in
insert ‘‘The Federal Deposit Insurance 31 CFR 1022.210(d)(1)(ii): ‘‘Money
Since 2020, banks lacking a Federal services businesses that have automated
Corporation’’ in place of ‘‘The Board of functional regulator have been subject to
Directors of the Federal Deposit data processing systems should
substantially similar AML/CFT program integrate their compliance procedures
Insurance Corporation.’’ The proposed requirements (31 CFR 1020.210(b)) as
rule would also add a definition of with such systems.’’ The removal of
banks with a Federal functional automated data processing language is
‘‘AML/CFT priorities’’ at regulator (31 CFR 1020.210(a)).106 The
§ 1010.100(nnn) to mean the most recent not intended to eliminate any
proposed rule would combine the substantive BSA compliance obligations
statement of Anti-Money Laundering program rules for both bank types.
and Countering the Financing of for casinos or MSBs. Rather, it reflects
The most significant difference that the application of the same risk-
Terrorism National Priorities issued
between the existing AML program based approach used in the other
pursuant to 31 U.S.C. 5318(h)(4).
rules is that 31 CFR 1020.210(b)(3) program rules, which allows—but does
Finally, as noted above, the proposed
requires banks lacking a Federal not mandate—the use of automated data
rule adds a definition of ‘‘Federal
functional regulator to: (1) have their processing systems.
Financial Institutions Regulatory
AML programs approved by the board of A few unique elements of the existing
Agency’’ at § 1010.100(ooo).103
Additionally, as required under directors or, if the bank does not have program rule for MSBs would be carried
section 6101(b) of the AML Act, FinCEN a board of directors, an equivalent over into the new rule language. In
consulted with Federal functional governing body within the bank; and (2) particular, the customer identification
regulators, particularly the Agencies, to make a copy of its AML program provisions of current 31 CFR
inform this rulemaking and coordinate available to FinCEN or its designee 1022.210(d)(1)(i)(A) and (d)(1)(iv), and
updates to the bank program rule. The upon request. FinCEN’s designee, in this the agent responsibility provision of
proposed rule is removing the provision instance, includes any agency to which current 31 CFR 1022.210(d)(1)(iii),
in FinCEN’s program rule for banks FinCEN has delegated examination would all be retained in the new MSB
requiring them to comply with the authority or the appropriate SRO. As program rule language. This language
parallel program rule for banks adopted previously discussed, the proposed rule reflects FinCEN’s longstanding
by the Federal functional regulators would require banks to obtain the appreciation of the special
since these program rules are consistent. approval of their AML/CFT programs circumstances applicable to many
from the board of directors, an members of the extraordinarily diverse
101 The CIP rules are located at 31 CFR 1020.220 equivalent governing body within the category of MSB, an appreciation that
(banks), 1023.220 (broker-dealers), 1024.220 bank, or appropriate senior remains as accurate now as it was when
(mutual funds), and 1026.220 (FCMs and IBCs). management, and it would require that these unique elements were included in
102 In particular, FinCEN first proposes to
the AML/CFT program be made FinCEN’s regulations.
simplify this BSA definition to refer only to the U.S.
Code provisions codifying the BSA, rather than to
available to FinCEN or its designee
upon request. With these changes, 3. Compliance and Implementation
any act of Congress from which these provisions
were originally derived. Second, FinCEN proposes FinCEN believes it would no longer be Dates
removing 18 U.S.C. 1956, 1957, and 1960 from the necessary to have two sets of program Current 31 CFR 1022.210(e),
regulatory BSA definition. These criminal
provisions were included in FinCEN’s BSA
rules for banks. Therefore, the proposed 1027.210(c), 1029.210(d), and
definition given their relationship to money rule would consolidate 31 CFR 1030.210(d) contain compliance and
laundering but are not otherwise linked to the other 1020.210(a) and (b) into a single set of implementation dates for MSBs;
BSA provisions and are not included in the AML rules applicable to all banks.
lotter on DSK8BHNXB4PROD with PROPOSALS4
DPMSJs; loan or finance companies; and
Act’s BSA definition in section 6003(1) of the Act.
Third, FinCEN proposes amending its BSA housing GSEs, respectively. The
definition to include 31 U.S.C. 5336 (i.e., the 104 15 U.S.C. 78a et seq. proposed rule would retain
operative provisions of the Corporate Transparency 105 7 U.S.C. 1 et seq.
implementation dates for MSBs and
Act), which was added to the BSA by section 6403 106 See FinCEN, Customer Identification
DPMSJs, respectively, since they set the
of the AML Act. Programs, Anti-Money Laundering Programs, and
103 Additionally, FinCEN proposes amending the Beneficial Ownership Requirements for Banks
time frames in which those specific
authority citations in the relevant CFR sections to Lacking a Federal Functional Regulator, 85 FR financial institution types are required
account for relevant statutory changes. 57129 (Sept. 15, 2020). to comply once they conduct certain
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18724 Federal Register / Vol. 91, No. 69 / Friday, April 10, 2026 / Proposed Rules
activities or pass thresholds that subject institutions are best placed to identify financial institutions free to use findings
them to AML/CFT program risks and allocate resources, and that from one or more processes to
requirements. The proposed rule would providing them with greater discretion holistically assess their ML/TF risks.
also update the citations for these in these areas will improve the quality Does this description of how financial
provisions (to 31 CFR 1022.210(d) and of AML/CFT compliance and reporting institutions would assess their ML/TF
1027.210(e)) to reflect other changes to law enforcement. Is this correct or risk under the proposed rule provide
made to §§ 1022.210(d) and 1027.210(e). should FinCEN consider adding more sufficient flexibility? How should
The proposed rule, however, would requirements regarding allocation of FinCEN describe ‘‘risk assessment
amend these provisions, as well as those resources? How might financial processes’’ to better reflect how
of other types of financial institutions, institutions assess changes in the total financial institutions assess ML/TF
such as loan or finance companies and allocation of resources devoted to an risks?
housing GSEs, to remove compliance AML/CFT program in a changing risk 10. Should risk assessment processes
dates that have passed and are therefore and cost environment? be required to take into account
irrelevant. additional or different criteria or risks
Establishing and Maintaining an AML/
4. Compliance With Other Rules CFT Program (V.C.) than those listed in the proposed rule?
For consistency and clarity, the If so, what additional factors should
3. Do financial institutions FinCEN consider requiring?
proposed rule would delete certain distinguish between ‘‘establishing a
unnecessary cross-references to other program’’ and ‘‘maintaining a program 11. How long does it generally take a
regulations. Specifically, the proposed by implementing the program’’? If so, financial institution to incorporate the
rule would no longer state that banks, how? Should FinCEN add anything to results of a risk assessment into the
broker-dealers, and FCMs and IBCs further define these terms in the final other aspects of its AML/CFT program?
must comply with the 31 CFR 1010.610 rule? What factors determine this timeframe?
and 1010.620 due diligence 4. Should the proposed rule’s Risk Assessment Processes (AML/CFT
requirements for foreign correspondent distinction between ‘‘establishing’’ and Priorities) (V.D.1.i.b.)
and private banking accounts.107 ‘‘maintaining’’ a program be modified?
Additionally, the proposed rule would Is the distinction between 12. What, if any, difficulties do
no longer state that banks must comply ‘‘establishing’’ and ‘‘maintaining’’ a financial institutions anticipate when
with the regulations of their Federal compliance program useful for financial incorporating the AML/CFT Priorities as
functional regulators. Those regulations institutions? part of their risk assessment processes?
and requirements apply irrespective of 5. Is clarification needed for banks to 13. What additional guidance on how
cross-references in the program rules, so determine what constitutes a to incorporate the AML/CFT Priorities
FinCEN is proposing to remove the ‘‘significant or systemic failure’’ to into a financial institution’s risk
cross-references to streamline the implement an effective AML/CFT assessment processes would it be useful
program rules and promote consistency. program (i.e., a failure to implement, in for FinCEN to provide?
FinCEN does not intend for these all material respects, a properly
changes to have any substantive effect. established AML/CFT program)? Risk Assessment Processes (Updates)
6. Is clarification needed for banks to (V.D.1.i.c.)
VI. Final Rule Effective Date
determine what constitutes a ‘‘failure to 14. The proposed rule requires that
FinCEN is proposing an effective date establish an AML/CFT program’’?
of 12 months from the date of issuance risk assessment processes are updated
7. How should the proposed rule promptly upon any change that the bank
of the final rule to allow sufficient time ensure that the regulations issued by
for financial institutions to review and knows or has reason to know
FinCEN and the appropriate Agencies significantly changes the bank’s ML/FT
implement the requirements of the function harmoniously? How should the
proposed rule. FinCEN solicits comment risks. Would the proposed update
proposed rule differentiate between the requirement change the way financial
on the proposed effective date. Secretary’s responsibility for issuing institutions currently update their risk
VII. Request for Comment regulations on establishing and assessment processes, and if so, how? Is
FinCEN welcomes comment on all maintaining AML/CFT programs and additional explanation needed
aspects of the proposed amendments the Agencies’ responsibilities for issuing concerning when a financial institution
and specifically seeks comment on the regulations on establishing and would be required to update its risk
questions below. FinCEN encourages maintaining AML/CFT programs under assessment? In particular, how might
commenters to reference specific their respective authorities? FinCEN clarify how risk assessment
question numbers when responding. Internal Policies, Procedures, and processes would be updated
An ‘‘Effective’’ AML/CFT Program (V.B.) Controls (V.D.1.) ‘‘promptly’’? Would an alternative
8. Do financial institutions expect any approach, such as periodic updates or a
1. The proposed rule sets forth the set schedule for updates, be preferable?
conditions for an effective AML/CFT changes to their existing internal
policies, procedures, and controls under Would an alternative standard, such as
program. Is the description of an ‘‘materially changes,’’ be clearer than
effective program sufficiently clear or is the proposed rule, which requires that
internal policies, procedures, and ‘‘significantly changes’’?
there anything further that FinCEN
controls be ‘‘risk-based’’ and 15. How does a financial institution’s
should consider adding in the final rule
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‘‘reasonably designed’’ to ensure monitoring for ML/TF risks and its risk
to clarify the concept of program
compliance with the BSA? assessment processes affect one
effectiveness?
another? Put differently, if there is a
2. The proposed rule reflects a Risk Assessment Processes (Generally) feedback loop between the two, please
determination by FinCEN that financial (V.D.1.i.) describe it, including the typical
107 See applicable program rules located at 31 9. The proposed rule refers to risk amount of time between discovering
CFR 1020.210(a)(1), (b)(1) (banks); 1023.210(a) assessment processes rather than a risk new risks and incorporating those
(broker-dealers); and 1026.210(a) (FCMs and IBCs). assessment process. This leaves findings into risk assessment processes.
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Federal Register / Vol. 91, No. 69 / Friday, April 10, 2026 / Proposed Rules 18725
Independent AML/CFT Program Testing required in writing; (b) what form (e.g., only to banks and the Federal banking
To Be Conducted by Bank Personnel or narrative descriptions, checklists, agencies in the proposed rule. FinCEN
by an Outside Party (V.D.2.) system configurations, or electronic welcomes comment on whether these
16. Under the proposed rule, a records) should such documentation provisions should apply to other
financial institution is required to take; and (c) what level of detail is financial institutions.
conduct independent AML/CFT appropriate for each component? 21. Is further clarification needed for
Should FinCEN instead eliminate the financial institutions to determine what
program testing. This requirement is
requirement that an AML/CFT program constitutes a ‘‘significant or systemic
already reflected in existing AML
be expressly required to be ‘‘written’’ failure to implement an AML/CFT
program rule requirements 108 as the
because, among other reasons, financial program in accordance with
requirement to include ‘‘an independent
institutions may be subject to other § 1020.210(c)’’?
audit function to test programs.’’ 109 22. Is further clarification needed for
FinCEN solicits comment on how applicable recordkeeping and
documentation requirements? What financial institutions to determine what
financial institutions may interpret and constitutes a ‘‘failure to establish an
would be the benefits or drawbacks of
carry out this requirement, based on the AML/CFT program in accordance with
not prescribing a mandatory written
proposed rule’s description of an § 1020.210(b)’’?
requirement in the regulation?
effective AML/CFT program. Are further 19. The proposed rule would require 23. The proposed rule refers to
clarifications on the independent AML/ that a financial institution’s written FinCEN’s ‘‘enforcement and supervision
CFT program testing requirement AML/CFT program be approved by its policy.’’ Does it introduce confusion to
necessary to ensure that audits carried board of directors, an equivalent label regulatory provisions having the
out by bank personnel or outside third governing body, or appropriate senior force of law as ‘‘policy’’? If so, how
parties are well-tailored, risk-based, and management. Should FinCEN further should the proposed regulatory
focused on effectiveness? clarify which aspects of the AML/CFT language be amended to eliminate that
AML/CFT Officer Located in the United program must be subject to such confusion?
States (V.D.3.) approval? In particular: (a) should 24. The proposed rule would add a
approval be required for each of the core requirement for an Agency to notify and
17. Under the proposed rule, while consider information provided by
program components (e.g., the risk
the AML/CFT officer must be located in FinCEN before initiating a significant
assessment processes framework;
the United States, personnel located AML/CFT supervisory action when
internal policies, procedures, and
outside of the United States would still acting pursuant to authority delegated
controls; transaction-monitoring and
be permitted to perform certain AML/ under this chapter. Should the proposed
escalation frameworks; independent
CFT functions. This language does not consultation process include an asset
testing structure; training program; and
alter existing regulations and guidance threshold—e.g., consultation is required
designation of responsible personnel),
that generally prohibit the sharing of for any significant AML/CFT
or would approval of the overall
SARs with personnel located outside of supervisory actions involving banks
program framework be sufficient; (b)
the United States other than limited should material revisions to particular with $10 billion or more in assets? In
circumstances, such as a bank’s foreign components (such as significant changes addition, or as an alternative, should the
head office or controlling company. Are to the institution’s risk assessment proposed rule not require but instead
any further clarifications on what duties methodology, monitoring architecture, provide the option for banks to request
personnel outside the United States may or governance structure) require re- their Agency consult with FinCEN prior
perform needed? approval at the same level; and (c) what to initiating a significant AML/CFT
Written AML/CFT Program and level of specificity should the approving supervisory action?
Approval (V.E.1) body be required to review and approve 25. The definition of significant AML/
(e.g., high-level program architecture CFT supervisory action includes the
18. The proposed rule standardizes term ‘‘any written communication.’’ Is
versus detailed procedures or
the long-standing requirement that an the term ‘‘any written communication’’
parameter-level settings)? Should
AML/CFT program be written. Should too broad? Are there negative
FinCEN instead eliminate the specified
FinCEN further clarify which specific consequences to including the term
approval requirement, allowing
elements of an institution’s AML/CFT ‘‘any written communication’’ in the
financial institutions flexibility in
program must be written, or is this proposed regulatory text? If so, please
determining how leadership oversight of
requirement generally understood in its describe. Should the term ‘‘any written
the AML/CFT program is structured?
current form? In particular: (a) which communication’’ be more clearly
What would be the benefits or
program components—such as risk defined or removed altogether?
drawbacks of not prescribing a
assessment processes; internal policies, mandatory approval requirement in the 26. As described above, the purpose
procedures, and controls; transaction regulation? If FinCEN does not of the FinCEN consultation requirement
monitoring rules and parameters; eliminate the specified approval is to ensure consistency in BSA/AML
escalation and reporting protocols; requirement, should FinCEN consider enforcement and supervision across
independent testing results; training amending the requirement? Are there banks, and for FinCEN to provide
materials; and documentation of alternatives to board of directors, an relevant information on the
designated personnel—should be equivalent governing body, or effectiveness and impact of an
appropriate senior management that institution’s AML/CFT program. While
108 See 31 CFR 1020.210(a)(2)(ii), (b)(2)(ii)
lotter on DSK8BHNXB4PROD with PROPOSALS4
would be more appropriate? Treasury, FinCEN, and the Agencies
(banks); 1021.210(b)(2)(ii) (casinos); 1022.210(d)(4)
(MSBs); 1023.210(b)(2) (broker-dealers); believe the benefits of a required
1024.210(b)(2) (mutual funds); 1025.210(b)(4)
Supervision and Enforcement (V.F.) consultation process outweigh the costs,
(insurance companies); 1026.210(b)(2) (FCMs and 20. The proposed rule would add a the parties recognize this adds
IBCs); 1027.210(b)(4) (DPMSJs); 1028.210(b)(4) new § 1020.221 to set forth a additional layers of review for financial
(operators of a credit card system); 1029.210(b)(4)
(loan or finance companies); 1030.210(b)(4) supervision and enforcement framework institutions and the Agencies during an
(housing GSEs). for banks. The new supervision and examination. Are there any avenues,
109 31 U.S.C. 5318(h)(1)(D). enforcement requirements would apply communication channels, or methods in
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18726 Federal Register / Vol. 91, No. 69 / Friday, April 10, 2026 / Proposed Rules
which FinCEN and the Agencies can should include a statement identifying rule may have a significant economic
streamline the consultation process and that the rule or proposed rule is a impact on a substantial number of
prevent logistical burdens for financial criminal regulatory offense and the certain types of affected small
institutions or delays in exam report authorizing statute.110 E.O. 14294 entities.117 Pursuant to analysis required
issuance? directs agencies to draft this statement by UMRA, FinCEN concludes it
27. Is the definition of the term in consultation with the Department of unlikely that the proposed rule, if
‘‘significant AML/CFT supervisory Justice. implemented, would result in a novel
action’’ sufficiently clear? Does the E.O. 14294 further directs that the annual expenditure of more than $193
inclusion of ‘‘unsafe or unsound regulatory text of all NPRMs and final million by State, local, and Tribal
practices or conditions’’ introduce rules with criminal consequences governments or by the private sector.118
confusion about what types of published in the Federal Register after While the PRA analysis included in this
supervisory actions would be subject to May 9, 2025, should explicitly state a NPRM introduces certain new pro forma
the FinCEN consultation requirement, mens rea requirement for each element accounting estimates to the existing
since those terms are not found in the of a criminal regulatory offense, Office of Management and Budget
BSA? accompanied by citations to the relevant (OMB) control numbers covered by the
28. FinCEN welcomes comment on provisions of the authorizing statute. rulemaking, these burdens and costs
provisions related to the use of Willful violations of the regulations largely reflect administrative updates
innovative tools to achieve effective set forth in this proposed rule may be that are being introduced to more
outcomes, specifically on how the subject to criminal penalties pursuant to accurately represent the activity
Director may consider the performance 31 U.S.C. 5322 and regulations currently undertaken by covered
of innovative activities that produce promulgated 31 CFR chapter X. The financial institutions to comply with
demonstrable outputs under the statutory authority for criminal liability existing program requirements
proposed supervision and enforcement requires a mens rea of willfulness as an unchanged by the proposed rule. The
framework. element under 31 U.S.C. 5322(a) and 31 aggregate PRA estimates do not
U.S.C. 5322(b). FinCEN’s existing represent, and should not be interpreted
Final Rule Effective Date (VI.) regulation, 31 CFR 1010.840, that sets to reflect, novel incremental costs
29. FinCEN is proposing an effective out criminal penalties for violations of attributable to the proposed rule.119
date of 12 months from the date of regulations promulgated in 31 CFR In its totality, FinCEN’s regulatory
issuance of the final rule to allow chapter X also includes a mens rea of impact analysis (RIA) anticipates that
sufficient time for financial institutions willfulness. In drafting this statement, the primary aggregate economic effects
to review and implement its FinCEN has consulted with the of the proposed rule would be
requirements. FinCEN solicits comment Department of Justice. reallocative insofar as the requirement
on the proposed effective date. X. Regulatory Impact Analysis for programs to support law
VIII. Severability enforcement and national security and
FinCEN has analyzed the proposed
advance AML/CFT Priorities remains
As a part of this proposal, FinCEN rule as required under E.O. 12866,111
unchanged. Thus, while total
proposes that if one portion of the E.O. 13563,112 E.O. 14192,113 the
expenditures on program compliance
proposed rule, if finalized, is found to Regulatory Flexibility Act (RFA),114 the
may not be reduced, the distribution of
be invalid, the invalidated portion of the Unfunded Mandates Reform Act of 1995
which financial institutions incur costs
regulation should be severed with the (UMRA),115 and the Paperwork
Reduction Act (PRA).116 and what they expended those resources
other portions of the proposed rule, as
This proposed rule has been on would be expected to change
well as the existing FinCEN regulations
determined to be a ‘‘significant responsively to the incentives
for each type of financial institution in
regulatory action’’ under section 3(f)(1) introduced by the proposed rule that
chapter X, remaining in full force and
of E.O. 12866, as it may have an annual better align institutions’ attention and
effect. FinCEN’s position is that
effect on the economy of $100 million activities with its unique ML/TF risks.
invalidation of any one provision, or
or more. FinCEN has included an Initial While aggregate costs would not be
application thereof to any one person or
Regulatory Flexibility Analysis (IRFA) expected to decrease, FinCEN’s analysis
circumstance, does not, and should not,
affect any other provision in this pursuant to the RFA as the proposed
117 This economic expectation is sensitive to key
proposed regulation or existing assumptions about how potentially affected
110 E.O. 14294, Fighting Overcriminalization in
regulations under chapter X. Each financial institutions would respond to the
Federal Regulations, 90 FR 20367 (issued May 9, proposed requirements. FinCEN requests comment
provision serves an important, related, 2025; published May 14, 2025). on whether it would instead be more reasonable to
but distinct purpose and application, 111 E.O. 12866, Regulatory Planning and Review,
certify that the proposed rule would not have a
designed to benefit the public by 58 FR 51735 (issued Sept. 30, 1993; published Oct. significant economic impact on a substantial
protecting the U.S. financial system 4, 1993). number of small entities. See infra section X.F #16.
112 E.O. 13563, Improving Regulation and
from illicit financial activity. FinCEN Regulatory Review, 76 FR 3821 (issued Jan. 18,
118 The UMRA requires an assessment of
accordingly has proposed to incorporate mandates with an annual expenditure of $100
2011; published Jan. 21, 2011). million or more, adjusted for inflation. 2 U.S.C.
this position into the respective rules for 113 See E.O. 14192, Unleashing Prosperity
1532(a). FinCEN has not anticipated material
each type of financial institution, such Through Deregulation, 90 FR 9065 (issued Jan. 31, changes in expenditures for State, local, and Tribal
that invalidity to one provision would 2025; published Feb. 6, 2025); Office of governments, insofar as they would not participate
Management and Budget, Guidance Implementing in the primary activities of monitoring or enforcing
not undermine the operability or Section 3 of Executive Order 14192, Titled compliance of the newly proposed requirements in
lotter on DSK8BHNXB4PROD with PROPOSALS4
usefulness of the other provisions. ‘‘Unleashing Prosperity Through Deregulation,’’ M– a way that differs from current involvement,
25–20 (Mar. 26, 2025), https://www.whitehouse.gov/ thereby incurring novel incremental costs. But
IX. E.O. 14294 wp-content/uploads/2025/02/M-25-20-Guidance- because the proposed rule would affect entities in
Section 5 of E.O. 14294 directs that all Implementing-Section-3-of-Executive-Order-14192- the private sector that are covered financial
Titled-Unleashing-Prosperity-Through- institutions, FinCEN has considered expenditures
future notices of proposed rulemaking Deregulation.pdf. these private entities may incur, pursuant to
and final rules published in the Federal 114 5 U.S.C. 601 et seq.
UMRA, as part of the regulatory impact in its
Register, the violation of which may 115 2 U.S.C. 1532. assessment below.
constitute criminal regulatory offenses, 116 44 U.S.C. 3501 et seq. 119 See infra section X.E.
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Federal Register / Vol. 91, No. 69 / Friday, April 10, 2026 / Proposed Rules 18727
concludes that they would also not be 14192; 123 the RFA; 124 the UMRA; 125 because at best this activity would
expected to increase, and because the