All in Regulatory Update

Fourth BSA Exam Manual Update Released

Adam Witmer
BSA, Regulatory Update

On 12/1/21, the Federal Financial Institutions Examination Council (FFIEC) released their fourth update of their BSA/AML Examination Manual. This release, which is the fourth update in the last two years, added one new section and updated three existing sections of the Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual.

Fed Revises LIBOR FAQs

Adam Witmer
Regulatory Update

On 11/19/21, the Federal Reserve Board updated their FAQs regarding the transition away from the London Interbank Offered Rate (LIBOR). Originally issued on July 29, 2021, Federal Reserve Letter SR 21-12 was revised to provide additional frequently asked questions in response to questions from institutions regarding the transition away from using LIBOR as a reference rate. The updated FAQs, together with the FAQs issued in July 2021, were included with the letter.

Joint Statement on Crypto-Asset Policy Initiative

Adam Witmer
Regulatory Update

On 11/23/21, the joint agencies issued a statement summarizing their interagency “policy sprints” focused on crypto-assets and providing a roadmap of future work related to crypto-assets. In their release, the agencies explain that the statement describes the focus of the preliminary work conducted through the sprints undertaken by the agencies. It summarizes the agencies’ plan to provide greater clarity throughout 2022 on whether certain crypto-related activities conducted by banking organizations are legally permissible, and related expectations for safety and soundness, consumer protection, and compliance with existing law and regulations.

FinCEN Notice on Environmental Crimes

Adam Witmer
BSA, Regulatory Update

On 11/18/21, the Financial Crimes Enforcement Network (FinCEN) issued a Notice to call attention to an upward trend in environmental crimes and associated illicit financial activity. In the Notice, FinCEN explained that it is highlighting this trend because of: (1) its strong association with corruption and transnational criminal organizations, (2) a need to enhance reporting and analysis of related illicit financial flows; and (3) environmental crimes’ contribution to the climate crisis, including threatening ecosystems, decreasing biodiversity, and increasing carbon dioxide in the atmosphere. FinCEN’s Notice provides financial institutions with specific suspicious activity report (SAR) filing instructions and highlights the likelihood of illicit financial activity related to several types of environmental crimes.

Agencies Issue Rule on Incident Notification

Adam Witmer
Regulatory Update

On 11/18/21, the joint agencies issued a final rule to improve the sharing of information about cyber incidents that may affect the U.S. banking system. According to the FDIC’s press release, the final rule requires a banking organization to notify its primary federal regulator of any significant computer-security incident as soon as possible and no later than 36 hours after the banking organization determines that a cyber incident has occurred. Notification will be required for incidents that have materially affected—or are reasonably likely to materially affect—the viability of a banking organization’s operations, its ability to deliver banking products and services, or the stability of the financial sector.

CFPB Data Spotlight on SARs on Elder Financial Exploitation

Adam Witmer
BSA, Regulatory Update

In mid-November of 2021, the CFPB released a “data spotlight” on suspicious activity reports on elder financial exploitation. The publication highlights trends relating to SARs filed by financial institutions that relate to elder financial exploitation. In general, the analysis primarily relies on public data for EFE SARs filed between January 2014 and December 2020, available through SAR Stats .

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