FinCEN and Banking Regulators Propose BSA/AML Framework Overhaul

April 13, 2026

FinCEN and banking regulators propose overhaul of BSA/AML framework

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On April 7, FinCEN issued a proposed rule to “fundamentally reform” financial institutions’ programs under the BSA to combat money laundering and counter the financing of terrorism. FinCEN noted the proposed rule supersedes and withdraws a prior proposal published in July 2024 and is part of Treasury’s broader effort to modernize the BSA/AML regulatory and supervisory framework and implement provisions of the Anti-Money Laundering Act of 2020 (AML Act).

Among other things, the proposed rule would: (i) refocus compliance obligations on program effectiveness by distinguishing between deficiencies stemming from program design (“establishment”) and failures in program operation (“maintenance”), with only significant or systemic operational failures warranting enforcement or significant supervisory action; (ii) require financial institutions to adopt risk-based BSA/AML programs that direct more attention and resources toward higher-risk customers and activities; (iii) clarify expectations related to independent testing and audit functions to ensure that examiners and auditors do not substitute their “subjective judgment” in place of institutions’ risk-based and reasonably designed programs; and (iv) introduce a notice and consultation framework requiring federal banking supervisors to provide FinCEN at least 30 days’ advance written notice before initiating a significant BSA/AML supervisory action.

Separately, the OCC, the FDIC, and the NCUA jointly issued a proposed rule to amend their respective BSA/AML program requirements to comport with FinCEN’s proposed rule. The rule would broadly align the agencies’ BSA/AML program requirements with FinCEN’s proposed framework, including the risk-based program mandate, the establishment/maintenance distinction, and the consultation requirement before initiating certain enforcement actions. The agencies also proposed explicitly incorporating FinCEN’s existing customer due diligence requirements into their respective regulations. The rule further clarifies that banks may share any information with FinCEN related to existing or potential BSA/AML enforcement or significant supervisory actions, including information that would ordinarily be considered non-public under the agencies’ respective rules. Comments on both proposed rules must be submitted by June 9.

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