BSA/AML Compliance and Enforcement

After nine months in office, it seems unlikely that the administration’s efforts to change the existing financial industry regulatory regime will affect enforcement of the Bank Secrecy Act (BSA) and its implementing regulations. To the contrary—it appears that law enforcement and national security will be top priorities for this administration. Because the BSA regulatory regime is designed to combat financial crime, money laundering and, most notably in the post-9/11 world, terrorism, banking institutions and their regulators will continue to focus on compliance. The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, known as the federal banking agencies (FBAs), will continue to scrutinize institutional compliance with both the existing regulatory requirements, as well as newer initiatives such as the Financial Crimes Enforcement Network’s (FinCEN) customer due diligence (CDD) rule (www.gpo.gov/fdsys/pkg/FR-2016-05-11/ pdf/2016-10567.pdf). Although leadership vacancies continue at several agencies key to setting policy and enforcing the BSA (including FinCEN and the FBAs), it seems likely that BSA enforcement will remain a top priority even after permanent officials are in place and their policy preferences are established.

Originally published in ABA Bank Compliance; reprinted with permission.