Anti-Money Laundering Programs for Insurance Companies, Loan or Finance Companies, and Banks Lacking a Federal Functional Regulator

Section 352 of the USA PATRIOT Act added subsection (h) to 31 U.S.C. 5318 of the BSA that requires the Secretary of the Treasury to require financial institutions to establish and maintain anti-money laundering (“AML”) programs. Pursuant to section 352, FinCEN issued regulations requiring insurance companies and non-bank residential mortgage lenders and originators (“RMLOs”) to develop and implement a written AML program. The program must be reasonably designed to prevent these financial institutions from being used for money laundering or the financing of terrorist activities, and to achieve and monitor compliance with applicable BSA requirements. On September 14, 2020, FinCEN issued a final rule implementing sections 352, 326 and 312 of the USA PATRIOT Act and removing the AML program exemption for banks that lack a Federal functional regulator, including, but not limited to, private banks, non-federally insured credit unions, and certain trust companies (the “Final Rule”). The Final Rule requires minimum standards for AML programs for banks without a Federal functional regulator to ensure that all banks, regardless of whether they are subject to Federal regulation and oversight, are required to establish and implement AML programs, and extends customer identification program requirements and beneficial ownership requirements to those banks not already subject to these requirements.

The latest form for Anti-Money Laundering Programs for Insurance Companies, Loan or Finance Companies, and Banks Lacking a Federal Functional Regulator expires 2023-12-31 and can be found here.