Banking and Finance Law Daily Wrap Up, FINANCIAL TECHNOLOGY—ABA says improvements needed in guidance on cross-border payment transparency, (Aug 24, 2026)

By Suzanne Cosgrove

The ABA asked FATF to either adopt a phased implementation for its recommendations or establish intermediate milestones to ensure its expectations are clear across jurisdictions.

In a letter dated August 21 sent to the Financial Action Task Force (FATF) regarding its draft Recommendation 16 implementation guidance, the American Bankers Association recommended changes that the association said would reduce operational challenges and preserve a risk-based approach to FATF standards on payment transparency.

Paris-based FATF is a 40-member international body that sets standards to ensure national authorities effectively go after illicit funds linked to drug trafficking, unlawful arms trade, cyber fraud, and other serious crimes.

Since FATF has stated it expects the revised R.16 to be fully implemented by 2030, and that the new standards would require a number of legal and operational changes by financial institutions, “we urge FATF to either adopt a phased implementation approach or establish intermediate milestones to ensure that legal, regulatory, and supervisory expectations are clear across jurisdictions,” the ABA said.

Privacy concerns. The ABA said it supports the flexibility included in FATF’s revised standard and emphasized “holistic ongoing monitoring (HOM) must remain a genuine, flexible alternative,” avoiding any de facto requirement for transaction-by-transaction, real-time or near-real-time checks, particularly across all payment rails.

But FATF guidance should be more explicit that verification of originator information for accuracy is satisfied through existing customer identification requirements at an account’s opening and ongoing due diligence for existing customers, the ABA said. Re-verification for all covered transactions is duplicative and unnecessary and should not be required, the association said.

Further, FATF should remain mindful of privacy and data security risks from requiring more information, the ABA said, including date of birth, to travel with covered payments and value transfers.

Industry engagement. At the same time, ABA said it supports ensuring that virtual account numbers will not obscure their country of origin, and it encouraged FATF to continue to engage with industry and national authorities on rapidly evolving technologies.

The ABA also requested clearer direction in areas where ambiguity could drive inconsistent implementation across jurisdictions. In particular, FATF should clarify financial institutions’ obligations where de minimis thresholds are not harmonized, the association said.

“We are concerned by the suggestion in the draft guidance that financial institutions must themselves adjudicate any conflicts between de minimis thresholds adopted by different jurisdictions,” the ABA said. Financial institutions benefit from regulatory consistency and clarity and requiring financial institutions to “meet the most stringent requirements likely to apply” is a vague and confusing statement.

Background. FATF is modernizing R.16 in response to changes in payments and evolving methods used by criminals and terrorists to move funds and transfer value, including through virtual assets and other new technologies.

The changes to Recommendation 16, also referred to as the 'Travel Rule' in the context of virtual assets, were agreed to by members at the FATF's June 2025 Plenary meeting. The recommendations included clarifying responsibilities within the payment chain, standardizing information requirements and requiring the introduction of tools that protect against fraud and error.

The FATF's decision-making body, the FATF Plenary, meets three times a year and holds countries accountable if they do not comply with the Standards. If a country repeatedly fails to implement FATF Standards it can be named a Jurisdiction under “Increased Monitoring” or a “High Risk Jurisdiction.”

Companies: American Bankers Association

RegulatoryActivity: BankSecrecyAct ChecksElectronicTransfers CrimesOffenses FinTech