FinCEN proposes fundamental Bank Secrecy Act reform
Summary
FinCEN and federal banking agencies have proposed a comprehensive overhaul of Bank Secrecy Act compliance requirements for financial institutions. The proposal aims to modernize AML program obligations and reporting thresholds. ABA Banking Journal reports on the reform implications for community and commercial banks.
What changed
FinCEN and federal banking regulators have proposed a significant restructuring of Bank Secrecy Act compliance obligations that would affect how banks implement and maintain AML programs. The reform represents the most comprehensive update to BSA requirements in recent years, potentially revising transaction thresholds, reporting obligations, and program structure requirements.
Banks and compliance officers should monitor this proposal closely as it progresses through the rulemaking process. If finalized, institutions would need to review and potentially revise their AML policies, procedures, and internal controls to align with the new requirements. Smaller community banks may see particular changes to their compliance burden depending on how revised thresholds are structured.
What to do next
- Monitor for FinCEN final rulemaking
- Review current BSA/AML program documentation
- Assess impact on compliance resources
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Apr 8, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
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FinCEN, banking agencies propose to overhaul Bank Secrecy Act compliance
April 7, 2026 Reading Time: 2 mins read The Financial Crimes Enforcement Network and banking agencies today proposed new rules to “fundamentally reform” compliance with the Bank Secrecy Act by setting standards for what financial institutions should include in their anti-money laundering programs.
The proposed rulemakings are part of what the Treasury Department said was a broader effort to modernize the AML/countering the financing of terrorism regulatory and supervisory framework “to better achieve the purposes of the BSA.” Among other things, the rules would establish that only “significant or systemic failures” by a financial institution to implement a properly established AML/CFT program would warrant an enforcement action or a significant supervisory action.
“For too long, Washington has asked financial institutions to measure success by the volume of paperwork rather than their ability to stop illicit finance threats,” Treasury Secretary Scott Bessent said in a statement. “Our proposal restores common sense with a focus on keeping bad actors out of the financial system, not burying America’s banks in more red tape.”
Four pillars
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.
ABA responds
In a statement, American Bankers Association President and CEO Rob Nichols commended the Treasury Department “for considering banks’ perspectives, cutting through red tape, and taking concrete steps to advance a true risk-based approach to BSA compliance.”
“By allowing banks to reallocate resources to higher risk activities and focusing enforcement on the most serious program deficiencies, this framework would strengthen the effectiveness of banks’ anti-money laundering and counter terror financing efforts while increasing the efficiency of bank compliance programs,” Nichols said.
“We welcome FinCEN’s elevated role in AML/CFT supervision and enforcement to ensure greater alignment and consistency across agencies,” he added. “This increased coordination would provide much-needed cohesiveness and stability for our nation’s banks, enabling them to better protect the financial system while continuing to serve customers and communities across the country.”
Tags: Anti-money laundering Bank Secrecy Act FDIC Financial crimes FinCEN OCC Share Tweet Pin
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