FinCEN proposes AML rewrite

FinCEN has proposed rewriting anti-money-laundering program rules so banks and other firms are judged more on whether controls work than on whether forms are complete. (fincen.gov) The Financial Crimes Enforcement Network, a Treasury bureau, issued the proposal on April 7, 2026 and set a June 9, 2026 deadline for public comments. FinCEN said the rule would “fully supersede” its earlier July 3, 2024 proposal. (fincen.gov) Anti-money-laundering and countering the financing of terrorism programs are the internal systems banks, brokers, casinos and money transmitters use to spot suspicious activity and report it under the Bank Secrecy Act. FinCEN’s 2024 proposal covered banks, casinos, money services businesses, broker-dealers, mutual funds, insurance companies and several other categories of financial institutions. (federalregister.gov) The rewrite would require programs to be “effective, risk-based, and reasonably designed,” with controls matched to each firm’s own money-laundering and terrorist-financing risks. FinCEN’s fact sheet says the rule is meant to recenter compliance on the Bank Secrecy Act’s core purpose: identifying, preventing and reporting financial crime. (fincen.gov) That changes what examiners are expected to test. FinCEN said the proposal would distinguish between flaws in program design and flaws in implementation, and would tell examiners and auditors not to substitute their own judgment for a firm’s risk-based decisions. (fincen.gov) In practice, that means firms will need to explain why they set particular alert thresholds, staffing levels, escalation paths and audit coverage, not just show that those items exist. FinCEN said institutions should be able to direct more resources to higher-risk customers and activities and less to lower-risk ones. (fincen.gov) The proposal also tightens FinCEN’s role in bank supervision. FinCEN said federal banking regulators would have to consult with the bureau before taking certain significant anti-money-laundering supervisory or enforcement actions. (fincen.gov) This rewrite traces back to the Anti-Money Laundering Act of 2020, which told Treasury to modernize program rules and fold national anti-money-laundering priorities into them. FinCEN’s July 2024 proposal added a mandatory risk-assessment process and required firms to review government-wide AML/CFT priorities as part of their programs. (federalregister.gov) Bank regulators moved in parallel. In August 2024, the Federal Reserve, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation and National Credit Union Administration proposed matching changes to their own Bank Secrecy Act compliance rules for the institutions they supervise. (federalregister.gov) Treasury Secretary Scott Bessent said the new proposal would stop measuring success by “the volume of paperwork” and focus instead on whether institutions keep illicit finance out of the system. The next test is whether banks, credit unions and other covered firms can persuade FinCEN that a more flexible rule will also produce more consistent enforcement. (fincen.gov)