Agencies make clear support for ‘innovative approaches’ to meeting BSA/AML obligations

Encouraging banks and credit unions to explore “innovative approaches” to meet anti-money laundering compliance obligations is the thrust of a joint statement issued Monday by the three federal banking regulators, the federal credit union regulator and U.S. Treasury law enforcement agencies.

“The statement recognizes that private sector innovation, including new ways of using existing tools or adopting new technologies – such as artificial intelligence – can help banks and credit unions identify and report money laundering, terrorist financing, and other illicit financial activity,” the statement reads. “The agencies will not penalize firms that maintain effective anti-money laundering programs but choose not to pursue innovative approaches.”

The regulators say in the statement that they are committed to “continued engagement” with the private sector and others to help financial institutions meet Bank Secrecy Act/anti-money laundering (BSA/AML) compliance obligations and to further strengthen the financial system against illicit financial activity.

“The agencies have or will establish projects or offices that will work to support the implementation of responsible innovation and new technology in the financial system,” the statement reads. “While banks and credit unions should continue to follow existing protocols for communication with their respective regulator, these projects or offices may also serve as central points of contact to facilitate communication related to innovation and new technology.”

The statement was issued by financial institution regulators – the Federal Reserve, the Federal Deposit Insurance Corp. (FDIC), the National Credit Union Administration (NCUA), and the Office of the Comptroller of the Currency (OCC); as well as the Treasury law enforcement agencies – the Financial Crimes Enforcement Network (FinCEN), and the Office of Terrorism and Financial Intelligence. The FDIC also issued a Financial Institution Letter (FIL 79-2018) about the statement.

Federal Reserve Board issues joint statement encouraging depository institutions to explore innovative approaches to meet BSA/anti-money laundering compliance obligations and to further strengthen the financial system against illicit financial activity

FDIC FIL: Interagency Statement on Innovative Efforts to Combat Money Laundering and Terrorist Financing