Markets Wired

Today, the FFIEC agencies published updates to the BSA/AML Examination Manual that represent a significant step forward in our efforts to improve how we ensure banks have effective programs to safeguard the banking system against financial crime, particularly money laundering and terrorist financing.

Publication of the manual continues a two-year process to evaluate BSA/AML effectiveness and improve how banks comply with related laws and regulations, while meeting the needs of law enforcement and protecting the nation’s banking system from being misused for illegal purposes. Interagency staff meet weekly and principals continue to meet monthly to discuss ways to update the nearly 50-year-old BSA/AML regime to better counter today’s criminal threats and promote the use of modern technology to protect the U.S. financial system from illicit activity. Those conversations have included stakeholders, including those from the banking industry, to gather additional feedback and insight.

As a result of these efforts, the agencies have issued statements clarifying the risk-focused approach to BSA/AML supervision, encouraging institutions to use new and creative technology approaches to ensure BSA compliance, and providing information on ways that lower-risk community banks can share resources related to their BSA compliance programs. The agencies also issued the first exemption in the nearly 20-year history of the Customer Identification Program rule. Today’s updates to the manual will improve and clarify the risk-focus of BSA examinations by providing more focused instructions to examiners.   

Our interagency work to make compliance with BSA/AML laws and regulations more effective and efficient is not over. The agencies continue to collaborate with law enforcement on informational needs to support the fight against criminal activities. The agencies also continue to work on updates to other sections of the manual, as well as additional guidance for the industry. Enhancing the ability of the BSA/AML regime to protect our banking system from criminal activities remains a top priority for the OCC.