Anti-Money Laundering and Countering the Financing of Terrorism Programs

The Charity & Security Network (C&SN) supports the proposed rules to modernize the Bank Secrecy Act but argues that the final rules must include specific protections for nonprofit organizations (NPOs). They advocate for a risk-based approach that distinguishes lawful humanitarian and advocacy activities from illicit finance to prevent "de-risking" and ensure that NPOs maintain access to the financial system.

The Financial Technology Association (FTA) supports the proposed rule's shift toward a risk-based AML/CFT framework and its emphasis on innovative technologies like AI. However, they request specific regulatory language to protect institutions from penalties for isolated operational errors, a longer 24-month implementation period, and the extension of "significant or systemic" enforcement thresholds to non-bank financial institutions.

Proof, a digital identity and transaction security platform, supports the proposed modernization of AML/CFT requirements and encourages the Agencies to explicitly allow the use of verifiable digital credentials (VDCs). The company argues that VDCs provide a secure, efficient, and privacy-enhancing way for financial institutions to meet identity verification and customer due diligence obligations.

The Bank Policy Institute and The Clearing House Association support the proposed rule's shift toward a risk-based AML/CFT framework but argue that key principles from the preamble must be codified into the formal regulatory text. They request specific language to protect banks from "second-guessing" by regulators, clarify the distinction between "establishment" and "maintenance" failures, and provide clear definitions for terms like "reasonably designed" and "significant and systemic."

The Wisconsin Bankers Association (WBA) supports the proposed reforms to modernize Bank Secrecy Act (BSA) requirements, specifically praising the shift toward a risk-based framework over arbitrary checklists. They request specific clarifications on definitions for "established" programs and "prompt" updates, as well as the inclusion of preamble commitments in the final rule to ensure regulatory consistency.

The American Fintech Council (AFC) supports the Agencies' efforts to modernize AML/CFT supervision by moving toward a risk-based, outcomes-oriented framework. They argue for regulatory flexibility that allows institutions to tailor compliance to their specific risk profiles, leverage existing infrastructure to avoid duplicative costs, and adopt innovative technologies like artificial intelligence to improve detection effectiveness.

TIAA, a financial services organization, expresses strong support for the proposal's goal of creating a risk-based AML/CFT framework. They argue for specific refinements to the rule, including the ability to exclude low-risk transactions from monitoring, risk-based employee training, the use of AI technology, and an increase in the SAR reporting threshold.

The American Bankers Association supports the proposed reforms to modernize Bank Secrecy Act (BSA) compliance, noting they move toward risk-based outcomes rather than prescriptive processes. However, the association requests specific additions to the final rules, such as incorporating preamble language that protects banks from regulatory "second-guessing" of reasonable risk assessments and extending the implementation period until examiners are fully trained.

The Wolfsberg Group supports the proposed rule as a significant step toward modernizing the U.S. AML/CFT regime and moving toward a risk-based approach. They recommend specific technical edits to codify clarity on "effective" program definitions, resource allocation flexibility, and the use of innovative technologies, while also requesting an extension of the effective date to allow for necessary coordination with the FFIEC Manual.

The Institute of International Bankers (IIB) supports the proposed rule's goals of modernizing AML/CFT programs and reducing unnecessary compliance burdens. They request specific clarifications regarding the distinction between "establishing" and "maintaining" programs, the definition of "significant or systemic" failures, and the inclusion of a "reasonableness" standard for risk-based resource allocations.