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An expertly-staffed hotline, federal regulatory tools, policies and procedures, and unlimited reviews for small-to-medium community banks across the U.S. — the only all-inclusive banking compliance advisory. C/A’s nearly 1700 products and tools support 48 separate bank compliance areas –an unlimited-access Bank Compliance Library – conforms to the most recently published federal banking rules and regulations. Whether you are building institutional exam-readiness or a bank compliance program, C/A has all the resources, access, and availability for one membership subscription. Co-owned by the Virginia Bankers Association and 28 other state bankers associations across the country. Contact C/A’s Membership Development Team at (888) 353-3933 or at: info@compliancealliance.com. To learn more about C/A’s new Virtual Compliance Officer service or call (833) 683-0701.

Compliance Alliance Featured Q&A

Question:

I’ve heard that other banks are beginning to refer to their BSA / AML programs, policies, and procedures as “AML / CFT.” Is this a mandatory change, and something that our bank should do as well?      

Answer:

Many banks are now beginning to use the term “Anti-Money Laundering / Countering the Financing of Terrorism” (AML/CFT) instead of “BSA/AML” to align (and for purposes of consistency) with the AML Act.  This is generally indicative of an overall initiative to have financial institutions update/enhance their existing BSA policies and programs to incorporate the AML Act and its associated processes to support more effective mitigation of risks connected with money laundering and the financing of terrorism. 

While, currently, there is not a direct requirement in the law for banks to adjust/update their internal programs to match this language, it would appear that the industry as a whole is gravitating towards this terminology – and more substantively, a more risk-based, innovative, and outcomes-oriented approach (as opposed to mere technical compliance with the requirements of the BSA) that goes along with it.

This framework is the crux of FinCEN’s proposed rule RIN 1506-AB52, “Anti-Money Laundering and Countering the Financing of Terrorism Programs.” The proposed rule, announced on June 28, 2024, stated that should it become finalized, financial institutions would become required to not only review the government-wide AML/CFT priorities issued by FinCEN in 2021, but also incorporate them “as appropriate, into risk-based programs, as well as provide for certain technical changes to program requirements;”. Additionally, financial institutions that do not already have a risk assessment process would need to develop one. The rule also provides greater detail for AML terminology and more defined parameters for assessing risk in this regard; but, again, the rule has yet to be finalized.

For further reference, please see FinCEN’s summary of the proposed rule, as well as the FDIC’s and the OCC’s two cents on the matter, as well. We have also discussed this on our monthly Huddles. If you have any other questions about it, feel free to reach out to us on the Compliance Hub Hotline.

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