BPI and ABA Respond to FinCEN Advanced Notice of Proposed Rulemaking on Establishing a No Action Letter Process

To Whom it May Concern:

The Bank Policy Institute[1] and the American Bankers Association[2] appreciate the opportunity to respond to the Financial Crimes Enforcement Network’s advance notice of proposed rulemaking on establishing a no action letter process. We support FinCEN’s efforts to implement such a process and believe that it has the potential to encourage and support financial institutions’ efforts to adopt innovative approaches and technologies for AML/CFT compliance. This is in line with the purpose of the Anti-Money Laundering Act of 2020 which was, among other things, to “encourage technological innovation and the adoption of new technology by financial institutions to more effectively counter money laundering and the financing of terrorism.”[3]

In our view, a no action letter process would (i) allow individual financial institutions to seek assurance from FinCEN that regulators will not take action against the institution for employing a certain technology, process, or program contemplated by the institution; (ii) allow for quick answers from regulators; and (iii) increase the flow of information from industry to FinCEN about new technologies and procedures, which could assist the agency’s rulemaking efforts, particularly those required under the AML Act.[4] It would be used in distinctly different ways than FinCEN’s administrative ruling and exceptive or exemptive relief authority. In addition, a no action letter process would be useful to banks should it contain the following characteristics – provide a no action letter that is accepted by all relevant regulators so as to truly provide the assurance institutions need to proceed with a covered activity, allow for a flexible and confidential application process, include timely response mechanisms for both simple and complex applications as well as the opportunity for a recipient to cure if problems arise, provide for the public release of no action letters subject to the requestor’s consent, and provide avenues for third parties to rely on published letters.

To read the full comment letter, click here, or click on the download button below.

[1] BPI is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s bank originated small business loans and are an engine for financial innovation and economic growth.

[2] The American Bankers Association is the voice of the nation’s $24 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $19.9 trillion in deposits and extend $11.4 trillion in loans.

[3] William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (“NDAA 2021”), § 6002, Pub. L. No. 116-283, 134 Stat. 3388, 4547.

[4] We particularly note that such a process could assist FinCEN’s testing methods rulemaking under Section 6209 of the AML Act.