WASHINGTON – As a result of a working group established by the U.S. Department of the Treasury’s Office of Terrorism and Financial Intelligence and the Federal depository institutions regulators, the Financial Crimes Enforcement Network (FinCEN) and its regulatory partners today issued a joint statement as part of continuing efforts to improve transparency into their risk-focused approach to Bank Secrecy Act (BSA)/anti-money laundering (AML) supervision. The risk-focused approach enables federal agencies to better tailor examination plans and procedures based on the unique risk profile of each bank.
“The risk-based approach to supervision enables banks to devote their compliance resources towards the areas of greater risk, making it more difficult for illicit actors to abuse our financial system,” said Sigal Mandelker, Treasury Under Secretary for Terrorism and Financial Intelligence. “The statement highlights the continued work by Treasury and its regulatory partners to enhance the effectiveness and efficiency of our anti-money laundering regime.”
The statement outlines common practices for assessing a bank’s money laundering/terrorist financing risk profile, assisting examiners in scoping and planning the examination and initially evaluating the adequacy of the BSA/AML compliance program. Using this approach, the agencies generally are able to allocate more resources to higher-risk areas and fewer resources to lower-risk areas when conducting BSA/AML examinations. The statement does not establish new requirements, and also notes that having a risk-based compliance program enables a bank to allocate compliance resources commensurate with its risk.
“We recognize that not all financial institutions share the same risk profile, but we are working to ensure that regulators are following common processes for assessing compliance. Proper management of money laundering and terrorist financing risk helps to safeguard our financial system, promotes national security, and protects our people from harm,” said FinCEN Director Kenneth A. Blanco. “This joint statement emphasizes our risk-based approach to supervision, and intends to help provide greater clarity to banks and the public on the expectations of Federal bank regulatory agencies.”
This statement was developed by a working group aimed at improving the effectiveness and efficiency of the BSA/AML regime. Members include the Federal Reserve Board, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and FinCEN.
Today’s joint statement is the third statement resulting from the working group.
Federal Reserve Darren Gersh (202) 452-2955
FDIC David Barr (202) 898-6992
FinCEN Steve Hudak (703) 905-3770
NCUA Ben Hardaway (703) 518-6330
OCC William Grassano (202) 649-6870