FinCEN

On January 1, 2021, the Senate voted to override President Trump’s veto of the National Defense Authorization Act (the “NDAA” or “Act”), which includes over 200 pages of significant reforms to the Bank Secrecy Act (“BSA”) and other anti-money laundering (“AML”) laws that have been working their way through Congress for several years.  The Senate’s…

On December 8, 2020, the House passed the National Defense Authorization Act (the “NDAA” or “Act”), which includes over 200 pages of significant reforms to the Bank Secrecy Act (“BSA”) and other anti-money laundering (“AML”) laws that have been working their way through Congress for several years. Despite some remaining objections from President Trump and…

On November 19, 2020, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Financial Crimes Enforcement Network, National Credit Union Administration, and Office of the Comptroller of the Currency (collectively, the “Agencies”) issued a joint fact sheet clarifying how banks subject to the Bank Secrecy Act (“BSA”) should apply a risk-based approach to customer due diligence (“CDD”) requirements for charities and other non-profit organizations.
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Continue Reading Federal Banking Agencies and FinCEN Issue Joint Statement on Risk-Based Approach to Customer Due Diligence for Charities and Non-Profit Organizations

On Monday, September 14, 2020, the Financial Crimes Enforcement Network (“FinCEN”) issued a final rule (the “final rule”) requiring minimum standards for anti-money laundering (“AML”) programs for banks without a federal functional regulator (“covered banks”). The final rule implements a notice of proposed rulemaking issued on August 25, 2016.

The final rule applies to a limited set of specialized institutions, including, among others: state-chartered non-depository trust companies, non-federally insured credit unions, and a small number of other non-federally insured state-chartered institutions, private banks, and international banking entities. The date for these covered banks to come into compliance with the final rule is March 15, 2021, which is 180 days after the final rule was issued.…

Continue Reading FinCEN Issues Final Rule on Bank Secrecy Act Requirements for Banks Without a Federal Functional Regulator

As we noted in a client alert late last week, the federal banking agencies released on August 13, 2020, a joint statement on enforcement of Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”) requirements.  At the time, the Federal Deposit Insurance Corporation made reference to a possible separate “Statement on Enforcement of the Bank Secrecy Act” from FinCEN. …

The Financial Crimes Enforcement Network (FinCEN) issued guidance today, which:

  • requested financial institutions affected by the COVID-19 pandemic to contact FinCEN’s Regulatory Support Section and their functional regulator as soon as practicable if they have concerns about potential COVID-19-related delays to their ability to timely file Bank Secrecy Act (BSA) reports, including Suspicious Activity Reports (SARs);
  • advised financial institutions to remain alert to malicious or fraudulent transactions involving bad actors seeking to exploit the pandemic.

FinCEN is not the only agency concerned about COVID-19-related fraud.  On Friday, Interpol issued a warning concerning financial scams related to COVID-19; yesterday, the FBI tweeted a warning on COVID-19 cyber-scams; and over the past week, New York’s Attorney General and its Department of Financial Services have issued warnings and, in the case of the Attorney General, multiple orders targeting price gouging and fake medical treatments.  (Update:  late in the day today, U.S. Attorney General William Barr released a memorandum directing U.S. Attorneys to clamp down on COVID-19-related crimes, including sales of fake cures and phishing email schemes.)…

Continue Reading FinCEN Issues COVID-19-Related Guidance on SAR Filings, Heightened Risk of Disaster Fraud

On Friday, the leaders of the Securities and Exchange Commission (“SEC”), Commodity Futures Trading Commission (“CFTC”), and Financial Crimes Enforcement Network (“FinCEN”) (collectively, the “Agencies”) issued a “Joint Statement on Activities Involving Digital Assets” (the “Joint Statement”).  The Joint Statement serves as a reminder that businesses engaged in activities involving digital assets – or, as they are sometimes called, virtual currencies or cryptocurrencies – should be attentive to their anti-money laundering (“AML”) obligations, including under the Bank Secrecy Act (“BSA”).

The Joint Statement notes that the BSA requires “financial institutions” to:  (1) establish and implement an effective AML program; and (2) comply with certain recordkeeping and reporting requirements, including the filing of suspicious activity reports (“SARs”).  These requirements apply not just to a financial institution’s traditional lines of businesses, but also to its businesses involving digital assets.…

Continue Reading Leaders of the SEC, CFTC, and FinCEN Issue Joint Statement Emphasizing AML Obligations for Digital Asset Activities

On July 22, 2019, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency (collectively, the “federal banking agencies”), and the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued a joint statement emphasizing their risk-focused approach to examinations of banks’ Bank Secrecy Act/anti-money laundering (“BSA/AML”) compliance programs (the “Statement”).  The Statement does not purport to create additional supervisory expectations for banks, but is meant to provide transparency into the risk-focused approach the agencies use for planning and performing BSA/AML examinations.  While the Statement largely restates existing rules and guidance and notes “it does not establish new requirements,” the fact that the agencies issued the statement may itself be an important, albeit implicit, acknowledgement of concerns expressed by some that BSA/AML examinations have become increasingly less risk-based in practice.
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Continue Reading Federal Banking Agencies and FinCEN Release Statement on Risk-Focused BSA/AML Supervision

On May 9, 2019, the Financial Crimes Enforcement Network (“FinCEN”) published interpretive guidance to reiterate how FinCEN’s existing regulations relating to money services businesses (“MSBs”) apply to business models involving convertible virtual currencies (“CVCs”). The guidance is the most significant CVC-related guidance that FinCEN has released since its 2013 guidance on the application of money transmission regulations to CVC transactions. The guidance does not establish any new regulatory requirements but, rather, synthesizes FinCEN’s existing framework of regulations, administrative rulings, and guidance since 2011 and applies this framework to common business models involving CVCs.
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Continue Reading FinCEN Issues Guidance to Synthesize Regulatory Framework for Virtual Currency

On December 3, 2018, the Board of Governors of the Federal Reserve System (“Federal Reserve), the Federal Deposit Insurance Corporation (“FDIC”), the Financial Crimes Enforcement Network (“FinCEN”), the National Credit Union Administration (“NCUA”), and the Office of the Comptroller of the Currency (“OCC”) (collectively, “agencies”) released a joint statement on innovative efforts to combat money laundering and terrorist financing.

In the joint statement, the agencies encouraged banks to consider and, if appropriate, responsibly implement innovative approaches with respect to their anti-money laundering (“AML”) and Bank Secrecy Act (“BSA”) compliance obligations. In particular, the agencies discussed innovative internal financial intelligence units that may be tasked with “identifying complex and strategic illicit finance vulnerability and threats.” The agencies also discussed artificial intelligence and digital identity technologies and recognized the value of these innovative approaches in strengthening banks’ BSA/AML compliance programs, as well as potentially reducing compliance costs.…

Continue Reading Financial Agencies Release Joint Statement on Innovative Efforts to Combat Money Laundering and Terrorist Financing