Removing Barriers Blog

CUNA Supports FinCEN Proposal for Non-Federally Regulated Institutions
Posted October 25, 2016 by CUNA Advocacy

This week, CUNA filed a letter with FinCEN in support of its proposal that would align certain requirements of “banks lacking a federal functional regulator” with those of federally-regulated banks. The proposed rule that would remove the anti-money laundering program exemption for banks that lack a federal functional regulator, which includes roughly 125 privately insured credit unions (PICU). 

CUNA supports the proposed rule as issued. We believe it should reduce confusion that has popped up from time to time regarding BSA-related expectations and requirements of PICUs. Further, it is our understanding that most—if not all—PICUs are required by their state financial regulator to comply with BSA requirements that parallel those required of federally insured credit unions by NCUA. 

In addition, CUNA supports the proposed rule because it will ensure that other—non-PICU—banks lacking a federal functional regulator (i.e., private banks and certain trust companies) will adhere to established requirements pertaining to anti-money laundering, customer identification, and beneficial ownership. Applying uniform standards across the entire banking system will improve FinCEN’s ability to combat financial crime. 

To further FinCEN’s effectiveness at combating financial crime, we ask it to consider expanding the scope of the proposed rule beyond “banks lacking a federal functional regulator” to also apply to certain payment and acceptance services, such as PayPal, Western Union, Apple Pay, and others. Expansion of the beneficial ownership requirements to such entities would further enhance the overall transaction system compliance profile, while ensuring entities that fall outside the traditional banking model comply with the same standards as the banking system.