No-action letter process contemplated by Treasury’s financial crimes enforcement unit

Public comments are sought by Aug. 5 on questions about a possible no-action letter process related to financial institutions’ compliance with anti-money laundering/countering the finance of terrorism (AML/CFT) requirements, according to a release Friday by Treasury’s Financial Crimes Enforcement Network (FinCEN).

FinCEN, in its release, said its request for comments follows a June report to Congress last year. In that report, the agency concluded that it should undertake a rulemaking to establish a no-action letter process to supplement the existing forms of regulatory guidance and relief that third parties may request from FinCEN. The report, FinCEN said, noted several potential benefits of a no-action letter process, including “encouraging a robust and productive dialogue with the public, promoting a culture of compliance, and enhancing transparency in the application and enforcement of the Bank Secrecy Act” (BSA).

Such a process, said FinCEN Acting Director Himamauli Das, “has the potential to spur innovation and enhance overall effectiveness of the AML/CFT framework and the implementation of financial institutions’ compliance programs.”

FinCEN said its assessment, which formed the basis of the June 2021 report, included consultation with the Attorney General, the federal functional regulators, state bank supervisors, state credit union supervisors, and other federal agencies as required by the Anti-Money Laundering Act of 2020.

A no-action letter “is generally understood to be a form of enforcement discretion where an agency states by letter that it will not take an enforcement action against the submitting party for the specific conduct presented to the agency,” FinCEN said.

It noted that a no-action letter process could affect other forms of regulatory guidance and relief that FinCEN already offers, including administrative rulings and exceptive or exemptive relief. It said the ANPR seeks input from the public on whether this process should be implemented, and if so, how the process should interact with these other tools.

The ANPR is slated for publication Monday in the Federal Register.

FinCEN Issues Advance Notice of Proposed Rulemaking for No-Action Letter Process