Fed proposes changes to anti-money laundering rules for banks; Barr dissents

 The Federal Reserve Board on Tuesday requested comment on a proposal to amend requirements for banks to maintain anti-money laundering programs to align with programs proposed by four other government agencies, the regulator said Tuesday.

Among the suggested changes, banks would focus their anti-money laundering, or AML, resources based on risk, with more attention devoted to higher-risk customers and activities.

It would also require banks to incorporate the Financial Crimes Enforcement Network's (FinCEN) AML priorities into their risk assessment processes. Under the proposal, once a bank has established an AML program, the Fed would focus supervision and enforcement activities on significant failures to implement the program, the regulator said.

Federal Reserve Governor Michael Barr, who had been vice chair for supervision, said he couldn't vote for the proposal to amend the AML rule "because of the introduction of a new, undefined standard for issuing matters requiring attention and for enforcement actions." He  said he's concerned that the "significant or systemic" standard may have unknown effects on the Fed's ability to effectively substantiate that a supervised institution establishes and maintains AML and CFT (countering the financing of terrorism) programs in compliance with the rule.

The other agencies proposing changes to align with one another are FinCEN, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp., and the National Credit Union Administration.

https://www.msn.com/en-us/money/markets/fed-proposes-changes-to-anti-money-laundering-rules-for-banks-barr-dissents/ar-AA27qjKZ