Banking and Finance Law Daily Wrap Up, BANK SECRECY ACT—Fed requests comments on AML program changes, (Jul 8, 2026)

By Joe Cox, J.D.

Multiple aspects of the proposed rule changes have drawn early criticism.

The Federal Reserve Board has issued a notice of proposed rulemaking that would amend requirements for banks to maintain anti-money laundering programs. Comments on the proposal are due Sept. 8, 2026.

Multiple agencies have been undertaking similar moves to revamp policies on the anti-money laundering/countering the finance of terrorism (AML/CFT or AML) front, as the overseeing bodies are looking to move to a more risk-centric analysis that prizes the search for risk over formulaic compliance measures. The Fed’s proposal has already drawn criticism both from within the Fed and from outside sources.

Overall AML shift. As part of the Trump Administration’s de-regulation movement, the recent months have seen a host of agency AML shifts. In April, the Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and National Credit Union Administration issued a notice of proposed rulemaking to align with a FinCEN shift in AML oversight priorities. At that time, FDIC chairman Travis Hill praised the rule shift as “embrac[ing] a risk-based approach to supervision” and noted that the proposals “would affirmatively encourage banks to allocate resources away from lower risk activities and toward higher risk activities” (see Banking and Finance Law Daily, Apr. 8, 2026).

Current Proposal. In a press release accompanying the announcement, the Fed again heralded the move as intending to step up oversight on risk-based priorities. Alignment continues to be a focus as the Fed noted that the proposals would require banks to incorporate identified AML priorities of the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) into risk assessment processes. Additionally, once banks established AML programs, Fed would focus its supervisory and enforcement aims on significant failures to implement those programs.

Criticisms of the Proposal. Almost immediately, at least two distinct areas of concern have been identified in regard to the proposal. In a brief statement, Fed Governor Michael S. Barr indicated that he could not vote for the proposal “because of the introduction of a new, undefined standard for issuing matters requiring attention and for enforcement actions.”

Barr clarified, “I am concerned that the "significant or systemic" standard may have unknown effects on the Board's ability to effectively substantiate that a supervised institution establishes and maintains AML and CFT programs in compliance with the rule. I believe it is critical that the Federal Reserve maintain a strong AML/CFT supervisory program.”

Likewise, the Bank Policy Institute (BPI) issued a release expressing its own concerns in regard to the proposals. BPI charges that the proposal “deviates materially from FinCEN and the other banking agencies’ proposals” in not giving FinCEN a coordinating role in AML/CFT examination.

“Congress has explicitly entrusted the Secretary of Treasury with setting national priorities for the AML/CFT regime and establishing the standards a compliance program must meet,” wrote the BPI. “The Federal Reserve’s proposal would leave examiners free to establish their own standards in conflict with those set byTreasury.” Additionally, BPI established concern that if Fed examiners set priorities outside of those set by the Treasury, banks could not then raise the issue with the Treasury.

Companies: Bank Policy Institute

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