FinCEN, Banking Agencies Propose Overhaul of AML Compliance Under the BSA

04/08/26

Federal regulators and FinCEN are signaling a significant change in expectations around anti-money laundering compliance.

The Financial Crimes Enforcement Network, in coordination with federal banking agencies, has proposed new rules designed to reshape how financial institutions meet requirements under the Bank Secrecy Act. The proposal outlines more defined standards for what should be included in AML and countering the financing of terrorism programs.

The U.S. Department of the Treasury said the initiative is part of a broader push to update and strengthen the AML/CFT regulatory framework so it more effectively supports the intent of the BSA.

A key component of the proposal is a revised enforcement approach, emphasizing that only "significant or systemic failures" in a bank's AML/CFT program would lead to enforcement actions or serious supervisory consequences.

Under FinCEN's proposal, a financial institution's AML/CFT program would need to incorporate four "core pillars." They are:

• Internal policies, procedures and controls, including risk assessment processes and, when applicable, ongoing customer due diligence. Financial institutions would be required to allocate more resources to higher-risk customers rather than lower-risk customers.
• Independent program testing. Such testing must assess compliance, focus on program effectiveness, and be conducted by individuals "truly independent" of the AML/CFT function.
• Designation of a U.S.-based compliance officer. However, other personnel involved in AML/CFT functions would be allowed to live outside the U.S.
• Ongoing employee training. Such training should reflect the institution's internal controls, risk assessment results, and current regulatory requirements, with the training tailored to an institution's risk profile and employee roles.

In addition, the joint rule by the FDIC, Office of the Comptroller of the Currency and National Credit Union Administration would align their supervision with the regulatory scheme proposed by FinCEN.

Comments are due 60 days after publication in the Federal Register. Reach out to OBL's Evan Kleymeyer with questions.