On Aug. 25, FinCEN posted a notice of proposed rulemaking (NPRM) in the Federal Register concerning customer identification and anti-money laundering programs for banks that lack a federal functional regulator. The NPRM would impose minimum standards for customer identification and anti-money laundering programs for all banks. The NPRM comes on the heels of FinCEN’s earlier rule requiring banks to conduct customer due diligence on the beneficial owners of legal entity customers and represents the latest effort undertaken by FinCEN to combat terrorist financing and money laundering on the national level.
In particular, the NPRM is intended to close what FinCEN characterizes as a regulatory gap between banks with a federal regulator and those without one, including private banks and credit unions that are not federally insured. According to FinCEN, banks without a federal regulator or no less susceptible to money laundering and terrorist financing risks than banks that do have a federal regulator. Therefore, FinCEN believes that extending customer identification, anti-money laundering, and beneficial ownership rules to these institutions is a means to further combat money laundering and terrorist financing.
The NPRM has a 60-day comment period and, according to FinCEN, the NPRM would impact approximately 600 institutions.