The Federal Reserve, alongside three other major banking regulators, has opened the door for public input on proposed changes to how banks structure their anti-money laundering programs. The joint notice, issued with the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the National Credit Union Administration, targets the foundational rules governing AML and counter-terrorism financing compliance at supervised financial institutions.
What the proposed amendments actually change
The core of the proposal revolves around making AML and CFT programs “outcomes-focused” rather than process-driven. Under the current framework, a bank can technically be compliant by having the right policies on paper, even if those policies aren’t particularly effective at catching illicit finance. The proposed amendments, directed by the AML Act of 2020, want to flip that script. Banks would need to demonstrate that their programs actually produce results, not just that they exist.
A key component requires banks to conduct formal risk assessments, a practice that many large institutions already perform but that isn’t uniformly mandated across the board. These assessments would need to incorporate FinCEN’s national priorities, which currently include things like combating corruption, fraud, transnational criminal organizations, and the financing of terrorism.
