Fed seeks comment on new anti-money laundering program rules
The Federal Reserve Board is inviting public comment on a proposed rule to update anti-money laundering and countering the financing of terrorism (AML/CFT) program requirements for its supervised banks. This proposal aims to align with recent legislative changes and other agencies' rules.
Modernizing illicit finance defenses
The Federal Reserve's proposed rule mandates that supervised banks establish and maintain effective anti-money laundering and countering the financing of terrorism (AML/CFT) programs.
These programs must be reasonably designed to identify, assess, and mitigate illicit finance risks.
The amendments are intended to align the Board's requirements with changes proposed by the Financial Crimes Enforcement Network (FinCEN), the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration (NCUA) on April 10, 2026.
This harmonization implements provisions of the Anti-Money Laundering Act of 2020 (AML Act) and aims to generate highly useful information on illicit financial transactions for law enforcement and national security agencies.
The Board has independent authority under 12 U.S.C. 1818(s) to prescribe these regulations, ensuring consistency across regulatory agencies and avoiding additional burden or confusion for banks.
Decades of anti-money laundering efforts
The Bank Secrecy Act (BSA), enacted in 1970, forms the foundation of U.S. efforts to combat money laundering and terrorism financing.
Subsequent legislation, including the Money Laundering Control Act of 1986 and the Annunzio-Wylie Anti-Money Laundering Act of 1992, expanded these requirements, introducing the "four pillars" of AML programs: internal policies, compliance officer, training, and independent audit.
The USA PATRIOT Act of 2001 further mandated customer identification programs (CIP) and broadened coverage.
While FinCEN and the Board have historically maintained separate but often aligned AML program rules, the AML Act of 2020 marked a comprehensive reform to modernize and strengthen this framework.
A necessary harmonization
This proposal represents a crucial step towards a more coherent and effective anti-money laundering framework across the U.S. financial system.
By aligning the Federal Reserve's rules with those of other agencies and the AML Act, it reduces regulatory arbitrage and enhances the overall fight against illicit finance.
Its impact on operational consistency for banks and the quality of intelligence for law enforcement is substantial.