Compliance Blog

Categories: BSA

FinCEN Director Talks Upgrading and Modernizing of AML/CFT System

Written by Shari R. Pogach, Regulatory Paralegal

In a speech to the New York University Law Program on Corporate Compliance and Enforcement, Financial Crimes Enforcement Network (FinCEN) Director Kenneth A. Blanco discussed FinCEN’s ongoing efforts to upgrade and modernize the U.S. system of anti-money laundering/countering financing of terrorism (AML/CFT).  The upgrades and modernization efforts are to incorporate innovative initiatives by financial institutions and others in order have the best and most actionable information available to protect Americans from harm.  Some of the actions FinCEN has taken in this vein include:

  • A joint statement with federal banking regulators outlining the circumstances in which banks and credit unions may enter into collaborative arrangements to meet their individual Bank Secrecy Act (BSA) obligations through the sharing of human, technological and other resources;
  • A joint statement with federal banking regulators encouraging banks and credit unions to take innovative approaches to combating money laundering, terrorist financing and other illicit financial threats;
  • Implementation of an Innovation Hours Program to provide financial technology and regulatory technology companies and financial institutions the opportunity to present their new and emerging innovative products and services to FinCEN during events that focus on financial services-related innovation.  NAFCU previously blogged on the minimum requirements to participate in Innovation Hours;
  • Initiated a project to catalogue the value of BSA reporting across the “entire value chain” of its creation and use, so as to better measure and communicate its value and develop a clearer understanding of what happens when any step in the chain is interrupted or diminished;
  • Enhancing engagement with the financial industry by revamping and re-energizing the Bank Secrecy Act Advisory Group (BSAAG).  The BSAAG is composed of representatives of federal law enforcement and regulatory agencies, state government agencies, self-regulatory organizations, trade associations and individual financial institutions that meet twice each year to discuss regulatory expectations, trends in illicit finance and opportunities to foster AML/CFT innovation;
  • Established the FinCEN Exchange, as discussed in this NAFCU blog post, where law enforcement and different types of financial institutions convene to share information on select topics in order to identify vulnerabilities, disrupt illicit financing and guard against other financial crimes. Director Blanco stated, “We truly believe sharing information through these public-private partnerships helps the financial institutions prioritize their efforts and results in more, and higher-quality, reports to FinCEN”; and
  • Expanded the FinCEN Director’s Law Enforcement Awards Program, which recognizes the efforts of law enforcement agencies that successfully used BSA reporting in their criminal investigations.  This helps underscore the importance of a successful partnership between the financial industry that provides BSA information and law enforcement that utilizes the information.

Director Blanco also highlighted FinCEN’s approach to deter the ever-evolving forms of illicit finance threats and related crimes involving terrorism, corruption, human trafficking, virtual currency, cyber-enabled threats and money laundering through real estate.

About the Author

Shari Pogach, NCCO, NCBSO, Regulatory Paralegal, NAFCU

 Shari Pogach, NCCO, NCBSO, Regulatory Paralegal

Shari R. Pogach, NCCONCBSO, has served as Regulatory Paralegal for NAFCU's Regulatory Compliance and Regulatory Affairs divisions since 2007.

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