Agency Information Collection Activities; Proposed Renewal; Comment Request; Renewal Without Change of Anti-Money Laundering Programs for Certain Financial Institutions, 49418-49425 [2020-17696]

Download as PDF 49418 Federal Register / Vol. 85, No. 157 / Thursday, August 13, 2020 / Notices comply with this requirement, the OCC is publishing notice of the renewal of the collection of information set forth in this document. Title: Licensing Manual. OMB Control No.: 1557–0014. Description: The Licensing Manual sets forth the OCC’s policies and procedures for the formation of a national bank or Federal branch or agency, entry into the Federal banking system by other institutions, and corporate expansion and structural changes by existing banks. The Manual includes sample documents to assist the applicant in understanding the types of information the OCC needs in order to process a filing. An applicant may use the format of the sample documents or any other format that provides sufficient information for the OCC to act on a particular filing, including the OCC’s electronic filing system, the Central Application Tracking System (CATS). On May 28, 2020,2 the OCC issued an interim final rule titled ‘‘Director, Shareholder, and Member Meetings’’ providing that: • FSAs will need to amend their bylaws and file their amendments with the OCC if they wish to utilize remote means of participation for member or shareholder meetings. • National banks and FSAs must elect procedures for remote participation at member or shareholder meetings. • Depending on which State or law the FSA elects to follow for procedures for remote means of communication, the FSA may have to amend its bylaws and file the amendment with the OCC. • National banks must indicate the procedures it will use for telephonic or electronic participation at shareholder meetings in their bylaws. • The OCC is considering allowing alternative/electronic means of notifying members/shareholders of meetings. OMB granted emergency clearance to the OCC for these changes. The OCC is now in the process of renewing the emergency clearance. Type of Review: Extension of a currently approved collection. Affected Public: Individuals; Businesses or other for-profit. Frequency of Response: On occasion. Estimated Number of Respondents: 3,715. Estimated Total Annual Burden: 12,534 hours. Comments submitted in response to this notice will be summarized and included in the submission to OMB. Comments are requested on: (a) Whether the information collections are necessary for the proper 2 85 FR 31943. VerDate Sep<11>2014 17:16 Aug 12, 2020 Jkt 250001 [Docket ID OCC–2020–0032] OCC on steps the agency may be able to take to ensure the continued health and viability of minority depository institutions and other issues of concern to minority depository institutions. Members of the public may submit written statements to the MDIAC by email to: MDIAC@OCC.treas.gov. The OCC must receive written statements no later than 5:00 p.m. EDT on Tuesday, August 25, 2020. Members of the public who plan to attend the meeting via remote means should contact the OCC by 5:00 p.m. EDT on Tuesday, August 25, 2020, to inform the OCC of their desire to attend the meeting and to obtain information about participation via remote means. Members of the public may contact the OCC via email at MDIAC@OCC.treas.gov or by telephone at (212) 790–4001. Attendees should provide their full name, email address, and organization, if any. Members of the public who are hearing impaired should call (202) 649– 5597 (TTY) no later than 5:00 p.m. EDT on Tuesday, August 25, 2020, to arrange auxiliary aids such as sign language interpretation for this meeting. Minority Depository Institutions Advisory Committee Brian P. Brooks, Acting Comptroller of the Currency. performance of the OCC’s functions, including whether the information has practical utility; (b) The accuracy of the OCC’s estimates of the burden of the information collections, including the validity of the methodology and assumptions used; (c) Ways to enhance the quality, utility, and clarity of the information to be collected; and (d) Ways to minimize the burden of information collections on respondents, including through the use of automated collection techniques or other forms of information technology. Theodore J. Dowd, Deputy Chief Counsel, Office of the Comptroller of the Currency. [FR Doc. 2020–17704 Filed 8–12–20; 8:45 am] BILLING CODE 4810–33–P DEPARTMENT OF THE TREASURY Office of the Comptroller of the Currency Office of the Comptroller of the Currency, Department of the Treasury. ACTION: Notice. AGENCY: The Office of the Comptroller of the Currency (OCC) announces a meeting of the Minority Depository Institutions Advisory Committee (MDIAC). SUMMARY: The OCC MDIAC will hold a public meeting on Tuesday, September 1, 2020, via remote means, beginning at 1:00 p.m. Eastern Daylight Time (EDT). ADDRESSES: The OCC will hold the September 1, 2020 meeting of the MDIAC via remote means. FOR FURTHER INFORMATION CONTACT: Beverly Cole, Designated Federal Officer and Deputy Comptroller for the Northeastern District, (212) 790–4001, Office of the Comptroller of the Currency, 340 Madison Ave., Fifth Floor, New York, New York 10173. SUPPLEMENTARY INFORMATION: By this notice, under the authority of the Federal Advisory Committee Act, 5 U.S.C. App. 2, and the regulations implementing the Act at 41 CFR part 102–3, the OCC is announcing that the MDIAC will convene a meeting at 1:00 p.m. EDT on Tuesday, September 1, 2020, via remote means. Agenda items will include current topics of interest to the industry. The purpose of the meeting is for the MDIAC to advise the DATES: PO 00000 Frm 00060 Fmt 4703 Sfmt 4703 [FR Doc. 2020–17741 Filed 8–12–20; 8:45 am] BILLING CODE 4810–33–P DEPARTMENT OF THE TREASURY Financial Crimes Enforcement Network Agency Information Collection Activities; Proposed Renewal; Comment Request; Renewal Without Change of Anti-Money Laundering Programs for Certain Financial Institutions Financial Crimes Enforcement Network (FinCEN), Treasury. ACTION: Notice and request for comments. AGENCY: As part of its continuing effort to reduce paperwork and respondent burden, FinCEN invites comments on the proposed renewal, without change, of currently approved information collections found in existing Bank Secrecy Act regulations requiring money services businesses, mutual funds, insurance companies, dealers in precious metals, precious stones, or jewels, operators of credit card systems, and loan or finance companies to develop and implement written antimoney laundering programs reasonably designed to prevent those financial institutions from being used to facilitate money laundering and the financing of terrorist activities. Although no changes SUMMARY: E:\FR\FM\13AUN1.SGM 13AUN1 Federal Register / Vol. 85, No. 157 / Thursday, August 13, 2020 / Notices are proposed to the information collections themselves, this request for comments covers a future expansion of the scope of the annual burden and cost estimates associated with these regulations. This request for comments is made pursuant to the Paperwork Reduction Act of 1995. DATES: Written comments are welcome, and must be received on or before October 13, 2020. ADDRESSES: Comments may be submitted by any of the following methods: • Federal E-rulemaking Portal: http:// www.regulations.gov. Follow the instructions for submitting comments. Refer to Docket Number FINCEN–2020– 0009 and the specific Office of Management and Budget (OMB) control numbers 1506–0020, 1506–0030, and 1506–0035. • Mail: Policy Division, Financial Crimes Enforcement Network, P.O. Box 39, Vienna, VA 22183. Refer to Docket Number FINCEN–2020–0009 and OMB control numbers 1506–0020, 1506–0030, and 1506–0035. Please submit comments by one method only. Comments will also be incorporated into FinCEN’s review of existing regulations, as provided by Treasury’s 2011 Plan for Retrospective Analysis of Existing Rules. All comments submitted in response to this notice will become a matter of public record. Therefore, you should submit only information that you wish to make publicly available. FOR FURTHER INFORMATION CONTACT: The FinCEN Regulatory Support Section at 1–800–767–2825 or electronically at frc@fincen.gov. SUPPLEMENTARY INFORMATION: I. Statutory and Regulatory Provisions The legislative framework generally referred to as the Bank Secrecy Act (BSA) consists of the Currency and Financial Transactions Reporting Act of 1970, as amended by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act) (Pub. L. 107–56) and other legislation. The BSA is codified at 12 U.S.C. 1829b, 12 U.S.C. 1951–1959, 31 U.S.C. 5311–5314 and 5316–5332, and notes thereto, with implementing regulations at 31 CFR Chapter X. The BSA authorizes the Secretary of the Treasury, inter alia, to require financial institutions to keep records and file reports that are determined to have a high degree of usefulness in criminal, tax, and regulatory matters, or in the conduct of intelligence or VerDate Sep<11>2014 17:16 Aug 12, 2020 Jkt 250001 counter-intelligence activities, to protect against international terrorism, and to implement anti-money laundering (AML) programs and compliance procedures.1 Regulations implementing Title II of the BSA appear at 31 CFR Chapter X. The authority of the Secretary to administer the BSA has been delegated to the Director of FinCEN.2 Section 352 of the USA PATRIOT Act added subsection (h) to 31 U.S.C. 5318 of the BSA. Section 352 mandates that financial institutions establish AML programs in order to guard against money laundering. Such AML programs must include, at a minimum, the following: (a) The development of internal policies, procedures, and controls, (b) the designation of a compliance officer, (c) an ongoing employee training program, and (d) an independent audit function to test programs. Pursuant to section 352, FinCEN issued regulations requiring money services businesses (MSBs) (31 CFR 1022.210), mutual funds (31 CFR 1024.210), insurance companies (31 CFR 1025.210), dealers in precious metals, precious stones, or jewels (31 CFR 1027.210), operators of credit card systems (31 CFR 1028.210), and loan or finance companies (31 CR 1029.210) to develop and implement written AML programs. This notice renews the OMB control numbers associated with these specific AML program regulations. The notice is not renewing the OMB control numbers associated with other types of financial institutions’ AML program regulatory requirements at this time for the reasons described below. On April 29, 2002, FinCEN issued an interim final rule to provide guidance to certain financial institutions concerning section 352 of the USA PATRIOT Act that requires financial institutions to establish AML programs. The interim final rule provided that banks, savings associations, credit unions, brokers or dealers in securities, futures commission merchants, and casinos would be deemed to be in compliance with section 352 if they established and maintained AML programs as required by existing FinCEN regulations, or their respective Federal regulator or selfregulatory organization (SRO).3 Prior to FinCEN issuing the interim final rule in 2002, casinos were the only 1 Section 358 of the USA PATRIOT Act added language expanding the scope of the BSA to intelligence or counter-intelligence activities to protect against international terrorism. 2 Treasury Order 180–01 (re-affirmed Jan. 14, 2020). 3 67 FR 21110 (April 29, 2002). This document is available at https://www.fincen.gov/sites/default/ files/federal_register_notice/352fininst.pdf. PO 00000 Frm 00061 Fmt 4703 Sfmt 4703 49419 type of financial institution subject to FinCEN AML program regulations.4 Since 1987, all federally insured depository institutions and credit unions have been required to have AML programs. In addition, in the interim final rule, FinCEN clarified that it was appropriate to implement section 5318(h)(1) of the BSA with respect to brokers or dealers in securities and futures commission merchants through their respective SROs.5 For that reason, FinCEN does not maintain OMB control numbers for the AML program regulatory requirements of banks, savings associations, credit unions, 4 See 58 FR 13538 (March 12, 1993) (final rule imposing AML program requirements on casinos) and 59 FR 61660 (Dec. 1, 1994) (final rule amending the AML program requirements for casinos to requires the training of casino personnel). These documents are available at https:// www.govinfo.gov/content/pkg/FR-1993-03-12/pdf/ FR-1993-03-12.pdf and https://www.govinfo.gov/ content/pkg/FR-1994-12-01/html/94-29662.htm, respectively. 5 The casino AML program regulations are covered under FinCEN OMB control number 1506– 0051, which is not set to expire until February 2021. The renewal of that control number, therefore, will be addressed later in 2020 in a separate FinCEN notice. Since 1987, all federally insured depository institutions and credit unions have been required by their Federal regulators to have AML programs. The applicable Federal regulator maintains the OMB control number for the AML program regulatory requirements of depository institutions and credit unions as follows: (a) Office of Comptroller of the Currency (AML program regulations at 12 CFR 21.21—covered by OMB control number 1557–0180); (b) Federal Reserve Board (AML program regulations at 12 CFR 208.63—covered by OMB control number 7100– 0310); (c) Federal Deposit Insurance Corporation (AML program regulations at 12 CFR 326.8— covered by OMB control number 3064–0087); and (d) National Credit Union Administration (AML program regulations at 12 CFR 748.2—covered by OMB control number 3133–0108). In the 2002 interim final rule, FinCEN also noted it was appropriate to implement section 5318(h)(1) of the BSA with respect to brokers or dealers in securities and futures commission merchants through their respective SROs, because the Securities and Exchange Commission (SEC) and the Commodity Futures Trade Commission (CFTC) and their SROs significantly accelerated the implementation of AML programs for their regulated financial institutions. Accordingly, 31 CFR 1023.210 and 31 CFR 1026.210 provide that brokers or dealers in securities, and futures commission merchants and introducing brokers in commodities, respectively, will be deemed to be in compliance with the requirements of section 5318(h)(1) of the BSA if they comply with any applicable regulation of their Federal functional regulator governing the establishment and implementation of AML programs. The SEC’s SRO is the Financial Industry Regulatory Authority (FINRA). The AML program requirements for brokers or dealers in securities is FINRA Rule 331. The CFTC’s SRO is the National Futures Association (NFA). The AML program requirements for futures commission merchant and introducing brokers in commodities is NFA Rule 2– 9(c). The SROs are not required to comply with the Paperwork Reduction Act of 1995. Therefore, there are no OMB control numbers for the AML program regulatory requirements of brokers or dealers in securities, futures commission merchants, and introducing brokers in commodities. E:\FR\FM\13AUN1.SGM 13AUN1 49420 Federal Register / Vol. 85, No. 157 / Thursday, August 13, 2020 / Notices brokers or dealers in securities, and futures commission merchants. II. Paperwork Reduction Act of 1995 (PRA) 6 Title: AML program requirements for MSBs (31 CFR 1022.210), mutual funds (31 CFR 1024.210), insurance companies (31 CFR 1025.210), dealers in precious metals, precious stones, or jewels (31 CFR 1027.210), operators of credit card systems (31 CFR 1028.210), and loan or finance companies (31 CFR 1029.210). OMB Control Numbers: 1506–0020, 1506–0030, and 1506–0035.7 Report Number: Not applicable. Abstract: FinCEN is issuing this notice to renew the OMB control numbers for the AML program regulatory requirements for certain financial institutions. Affected Public: Businesses or other for-profit institutions, and non-profit institutions. Type of Review: • Renewal without change of currently approved information collections. • Propose for review and comment a renewal of the portion of the PRA burden that has been subject to notice and comment in the past (the ‘‘traditional annual PRA burden’’). • Propose for review and comment an expansion of the scope of the PRA burden in the future (the ‘‘supplemental annual PRA burden’’). Frequency: As required. Estimated Number of Respondents: 305,897 financial institutions.8 Estimated Recordkeeping Burden: In Part 1 of this notice, FinCEN describes the breakdown of the estimated number of financial institution, by type, and the primary characteristics of their individual AML program requirements. In Part 2, FinCEN proposes for review and comment a renewal of the traditional annual PRA burden, which includes a scope and methodology similar to that used in the past, with a few additional criteria, and the incorporation of cost estimates. In past renewals of the OMB control numbers addressed in this document FinCEN estimated the hourly burden of (a) documenting an AML program for each type of financial institution, and (b) obtaining and verifying the identity of customers at the moment of establishing the initial relationship for providers and sellers of prepaid access only.9 The additional criteria and the methodology for estimating cost are described in further detail in Part 2. In Part 3, FinCEN proposes for review and comment a method to estimate the burden and cost of a future estimate of a supplemental annual PRA burden. Finally, in Part 4, FinCEN solicits input from the public about (a) the accuracy of the estimate of the traditional annual PRA burden; (b) the method proposed for the calculation of a future supplemental annual PRA burden; (c) the criteria, metrics, and questions FinCEN should take into consideration when researching the information required to determine the future supplemental annual PRA burden estimate; and (d) any other comments about the regulations and the proposed current and future burden and cost estimates of these requirements the public wishes to make. Part 1. Breakdown of Financial Institutions Covered by This Notice The breakdown of financial institutions, by type, covered by this notice, is reflected in Table 1 below: TABLE 1—BREAKDOWN OF FINANCIAL INSTITUTIONS COVERED BY THIS NOTICE, BY TYPE Number of financial institutions Type of financial institution Principal MSBs 10 ....................................................................................................................................................................................... Providers or sellers of prepaid access ............................................................................................................................... Others types of principal MSBs .......................................................................................................................................... 11 22,939 1,632 21,307 Agent MSBs ............................................................................................................................................................................................... Mutual funds .............................................................................................................................................................................................. Insurance companies ................................................................................................................................................................................. Dealers in precious metals, stones, and jewels ........................................................................................................................................ Operators of credit card systems .............................................................................................................................................................. Loans or finance companies ..................................................................................................................................................................... 12 229,161 Total .................................................................................................................................................................................................... 305,897 6 Public Law 104–13, 44 U.S.C. 3506(c)(2)(A). AML program regulatory requirements are currently covered under the following OMB control numbers: 1506–0020 (31 CFR 1022.210—AML programs for MSBs, 31 CFR 1024.210—AML programs for mutual funds, and 31 CFR 1028.210— AML programs for operators of credit card systems); 1506–0030 (31 CFR 1027.210—AML programs for dealers in precious metals, precious stones, or jewels); and 1506–0035 (31 CFR 1025.210—AML programs for insurance companies, and 31 CFR 1029.210—AML programs for loan and finance companies). There is no OMB control number associated with 31 CFR 1030.210—AML programs for housing government sponsored enterprises, because the purpose of the PRA is not to minimize burden on Federal agencies. (44 U.S.C. 3505(1)). 8 Table 1 below breaks down the types of financial institutions covered by this notice. 9 The MSB AML program regulations have a unique requirement. Specifically, 31 CFR 7 The VerDate Sep<11>2014 17:16 Aug 12, 2020 Jkt 250001 1022.210(d)(1)(iv) provides that a MSB that is a provider or seller of prepaid access must establish procedures to verify the identity of a person who obtains prepaid access under a prepaid program and obtain identifying information concerning such a person, including name, date of birth, address, and identification number. Sellers of prepaid access must also establish procedures to verify the identity of a person who obtains prepaid access to funds that exceed $10,000 during any one day and obtain identifying information concerning such a person, including name, date of birth, address, and identification number. 10 The definition of MSB covers both principal MSBs and agents. Under 31 CFR 1022.210(d)(1)(iii), a person that is a MSB solely because it is an agent for another MSB and the MSB for which it serves as an agent (the principal MSB), may by agreement allocate between them responsibility for developing the policies, procedures, and internal controls of PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 13 1,591 14 1,200 15 20,000 16 6 17 31,000 the AML program. However, each MSB remains solely responsible for the actual implementation of an effective AML program. 11 FinCEN’s MSB registration database. 12 Id. 13 Based on estimates provided for the 2018 notice to renew OMB control number 1506–0033, 83 FR 46011 (Sept. 11, 2018). 14 Based on estimates provided for the 2018 notice to renew OMB control number 1506–0035 (83 FR 34298 (July 19, 2018)). 15 Based on estimates provided for the 2018 notice to renew OMB control number 1506–0030 (83 FR 46014 (Sept. 11, 2018)). 16 Based on estimates provided for the 2018 notice to renew OMB control number 1506–0020 (83 FR 42558 (Aug. 22, 2018)). 17 See supra note 14. E:\FR\FM\13AUN1.SGM 13AUN1 49421 Federal Register / Vol. 85, No. 157 / Thursday, August 13, 2020 / Notices Section 352 requires that an AML program must encompass four key elements: (a) Establishing policies, procedures, and internal controls reasonably designed to assurance compliance with the BSA; (b) designating a person to ensure day to day compliance with the AML program and the BSA; (c) providing education and training to appropriate personnel concerning their responsibilities under the AML program; and (d) implementing an independent review to monitor and maintain an adequate AML program.18 The AML program regulations for MSBs, mutual funds, insurance companies, dealers in precious metals, precious stones, or jewels, operators of credit card systems, and loan or finance companies require these financial institutions to implement an AML program that is reasonably designed to prevent the financial institution from being used to facilitate money laundering and terrorist financing. The AML program must be in writing and must be commensurate with the financial institution’s risk profile.19 The AML program regulations for mutual funds, for which the corresponding OMB control number is being renewed as part of this notice, include customer due diligence (CDD) requirements.20 FinCEN will consider a mutual fund’s CDD requirements as part of the future supplemental annual PRA burden in this notice. Part 2. Traditional Annual PRA Burden and Cost The scope of the traditional annual PRA burden and cost estimates of the AML program in this renewal is limited to: Maintaining and updating the written AML program (Action A); storing the written AML program (Action B); producing a copy of the written AML program if requested by regulatory examiners or law enforcement (Action C); for mutual funds, securing approval of the AML program by the board of directors or trustees (Action D); 21 and for providers or sellers of prepaid access, obtaining, verifying, and maintaining cardholder identifying information (Action E). For purposes of the estimate of the AML program traditional annual PRA burden, FinCEN has made the following assumptions: (a) In all cases, agent MSBs agree to abide by the policies, procedures, and internal controls established by their principal MSBs. (b) Principal MSBs establish minimum training and independent review standards for their agents.22 (c) The written AML program is stored as an electronic file. The estimated annual burden (5 minutes per financial institution) represents the administrative burden involved in processing the storage of the written program, and not just the time of actual electronic storage, which would be nearly instantaneous. (d) Producing the written AML program electronically to regulatory or law enforcement agencies, upon their request. FinCEN estimates the annual burden of producing the written program at 5 minutes per financial institution. The estimated annual burden represents the administrative burden involved in producing the program upon request, and not just the time required to make the program available to the requestor for inspection (for example, the actual electronic transmission), which would be nearly instantaneous. (e) The estimated number of prepaid access arrangements established annually remains at approximately 2.6 million. The collection and storage of cardholder identification information is automated.23 The estimated burden associated with each portion of the traditional annual PRA estimate is as follows: TABLE 2—BURDEN ASSOCIATED WITH EACH PORTION OF THE TRADITIONAL ANNUAL PRA ESTIMATE Number of financial institutions 24 Total hourly burden Action Instances per year Time per instance Type of financial institution A. Maintaining and updating the written AML program. B. Storing the written AML program. C. Producing the AML program upon request. D. Board of directors/trustees approval of the AML program. E. Obtaining, verifying, and storing cardholder identifying information. 1 per financial institution ....... 1 hour ............ All except agent MSBs ......... 76,736 76,736 1 per financial institution ....... 5 minutes ....... All .......................................... 305,897 25,491 1 per financial institution ....... 5 minutes ....... All .......................................... 305,897 25,491 1 per financial institution ....... 1 hour ............ Mutual funds ......................... 1,591 1,591 2.6 million (once per card) ... 2 minutes ....... Providers or sellers of prepaid access. 1,632 86,667 Total Hourly Burden ....... ............................................... ........................ ............................................... ........................ 215,976 18 Although FinCEN is providing information about burden and cost with respect to the four key elements of an AML program, FinCEN wants to emphasize that the four key elements of an AML program are statutory requirements. 19 The AML program regulations for mutual funds, specifically, also require the program to be approved in writing by their board of directors or trustees. 31 CFR 1024.210(a). 20 31 CFR 1024.220. 21 The mutual fund AML program regulations are the only AML program regulations being renewed in this notice with a regulatory requirement to VerDate Sep<11>2014 17:16 Aug 12, 2020 Jkt 250001 secure board of directors’ or trustees’ approval of the AML program. For that reason, FinCEN is only including the burden and cost of the board of directors’ or trustees’ approval for mutual funds in the traditional annual PRA burden and cost estimate. FinCEN recognizes, however, that the other financial institutions covered by this notice may also get their board or directors or trustees to approve their AML programs as a best practice. 22 According to FIN–2016–G001, ‘‘Guidance on Existing AML Program Rule Compliance Obligations for MSB Principals with Respect to Agent Monitoring,’’ (March 11, 2016), MSB principals are required to develop and implement PO 00000 Frm 00063 Fmt 4703 Sfmt 4703 risk-based policies, procedures, and internal controls that ensure adequate ongoing monitoring of agent activity, as part of the principal’s implementation of its AML program. Imposing a minimum level of general training and a minimum frequency of independent review allows principal MSBs to standardize in part these agent monitoring responsibilities. This document is available at https://www.fincen.gov/resources/statutesregulations/guidance/guidance-existing-amlprogram-rule-compliance-obligations. 23 83 FR 42558 (Aug. 22, 2018). 24 As set out in Table 1 above. E:\FR\FM\13AUN1.SGM 13AUN1 49422 Federal Register / Vol. 85, No. 157 / Thursday, August 13, 2020 / Notices FinCEN’s estimate for the total traditional hourly annual PRA burden is 215,976 hours. FinCEN identified four roles and corresponding staff positions involved in maintaining an AML program in order to estimate the hourly costs associated with the burden hour estimates calculated in this part. Those administrative review and filing and producing the AML program on request). FinCEN calculated the fully-loaded hourly wage for each of these four roles by taking the median wage as estimated by the U.S. Bureau of Labor Statistics (BLS), and computing an additional benefits cost as follows: 25 are: (i) General oversight (board of directors/trustees approval of the AML program); (ii) general supervision (providing process oversight); (iii) direct supervision (reviewing operational-level work and cross-checking all or a sample of the work product against their supporting documentation); and (iv) clerical work (engaging in research and TABLE 3—TOTAL HOURLY REMUNERATION (FULLY-LOADED HOURLY WAGE) PER ROLE AND BLS JOB POSITION Role BLS-code Board of directors/trustees ...................................... General supervision ................................................ Direct supervision .................................................... Clerical work (research, review, and filing and producing the program upon request). Median hourly wage BLS-name 11–1010 11–3031 13–1041 43–3099 Chief Executive 26 .......... Financial Manager ......... Compliance Officer ........ Financial Clerk ............... Benefit factor $88.68 62.45 33.20 20.40 Fully-loaded hourly wage 1.50 1.50 1.50 1.50 * $133.00 93.68 49.80 30.60 * $133.02 rounded to $133.00. FinCEN estimates that, in general and on average,27 each role would spend different amounts of time on each portion of the traditional annual PRA burden, as follows: For Action A set out in Table 2 above, annually maintaining and updating the AML program documentation, the cost of each hour of burden is estimated to be $48.00, as shown in Table 4 below. Action A applies to all financial institutions covered by this notice, except agent MSBs. TABLE 4—WEIGHTED AVERAGE HOURLY COST OF MAINTAINING AND UPDATING AML PROGRAM DOCUMENTATION General supervision Direct supervision Clerical work (case review) % time Hourly cost % time Hourly cost % time Hourly cost 10% $9.37 60% $29.88 30% $9.18 Weighted average hourly cost $48.00 * *$48.43 rounded to $48.00. For Actions B, C, and E set out in Table 2 above, the cost of each hour of burden is estimated to be $33.00, as shown in Table 5 below: • Action B—storing the AML program. (Applies to all financial institutions covered by this notice). • Action C—producing of the AML program upon request. (Applies to all financial institutions covered by this notice). • Action E—obtaining, verifying, and storing prepaid access customer identifying information. (Only applies to providers and sellers of prepaid access). TABLE 5—WEIGHTED AVERAGE HOURLY COST OF STORING AND PRODUCING AML PROGRAM DOCUMENTATION UPON REQUEST, AND OBTAINING, VERIFYING, AND STORING PREPAID ACCESS CUSTOMER IDENTIFYING INFORMATION General supervision Direct supervision Clerical work (recordkeeping) % time Hourly cost % time Hourly cost % time Hourly cost Weighted average hourly cost 1% $0.94 9% $4.48 90% $27.54 $33.00 * *$32.96 rounded to $33.00. For Action D set out in Table 2 above, approval of a mutual fund’s AML program by the board of directors or trustees, the cost of each hour of burden would be $133.00, as shown in Table 3 25 U.S. Bureau of Labor Statistics, Occupational Employment Statistics-National, May 2019, available at https://www.bls.gov/oes/tables.htm. The most recent data from the BLS corresponds to May 2019. For the benefits component of total compensation, see U.S. Bureau of Labor Statistics, Employer’s Cost per Employee Compensation as of December 2019, available at https://www.bls.gov/ news.release/ecec.nr0.htm. The ratio between benefits and wages for financial activities, credit intermediation and related activities is $15.95 (hourly benefits)/$32.05 (hourly wages) = 0.50. The benefit factor is 1 plus the benefit/wages ratio, or 1.50. Multiplying each hourly wage by the benefit factor produces the fully-loaded hourly wage per position. 26 FinCEN recognizes that a board of directors/ trustees would be on a different pay scale than a chief executive officer, however, chief executive officer is the highest paid category in the BLS VerDate Sep<11>2014 17:16 Aug 12, 2020 Jkt 250001 PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 Occupational Employment Statistics. For that reason, FinCEN is conservatively estimating the highest wage rate available for its cost analysis. 27 By ‘‘in general,’’ FinCEN is speaking without regard to outliers (e.g., financial institutions with AML programs with complexities that are uncommonly higher or lower than those of the population at large). By ‘‘on average,’’ FinCEN means the mean of the distribution of each subset of the population. E:\FR\FM\13AUN1.SGM 13AUN1 49423 Federal Register / Vol. 85, No. 157 / Thursday, August 13, 2020 / Notices above. Action D only applies to mutual funds.28 The total cost of the traditional annual PRA burden would be $8,437,348, as reflected in Table 6 below: TABLE 6—TOTAL COST OF TRADITIONAL ANNUAL PRA BURDEN Total burden in hours Action Hourly cost Total cost $ (Table 2) Source A. Maintaining and updating the written AML program .................................. B. Storing the written AML program ................................................................ C. Producing the written AML program upon request .................................... D. Board of directors/trustees approval of the AML program ......................... E. Obtaining, verifying, and storing prepaid access customer identifying information. 76,736 25,491 25,491 1,591 86,667 $48.00 33.00 33.00 133.00 33.00 Total Cost ................................................................................................. ........................ ........................ Part 3. Supplemental Annual PRA Burden In the future, FinCEN intends to add a supplemental annual PRA burden calculation for the AML program regulations covered by this notice, reflecting the annual PRA burden and cost involved in implementing certain actions that are part of the four key elements of an AML program. As noted above, for all of the financial institutions covered by this notice, an AML program must encompass four key elements: (a) Establishing policies, procedures, and internal controls reasonably designed to ensure compliance with the BSA; (b) designating a person to ensure day to day compliance with the AML program and the BSA; (c) providing education and training to appropriate personnel concerning their responsibilities under the AML program; and (d) implementing an independent review to monitor and maintain an adequate AML program.29 The burden hours and cost of two of the key elements of an AML program (internal controls, and designation of a BSA compliance officer) are accounted for individually across all of the 42 OMB control numbers FinCEN maintains for the various BSA regulatory requirements because those requirements necessitate that internal controls be put in place and that a BSA compliance officer be designated. For that reason, for the OMB control numbers and related regulations 28 See supra note 21. FinCEN is providing information about burden and cost with respect to the four key elements of an AML program, FinCEN wants to emphasize that the four key elements of an AML program are statutory requirements. 30 As noted above, the burden hours and cost of internal controls will be accounted for individually across all of the 42 OMB control numbers FinCEN 29 Although VerDate Sep<11>2014 17:16 Aug 12, 2020 Jkt 250001 Table Table Table Table Table 4 5 5 3 5 ........... ........... ........... ........... ........... $3,683,328 841,203 841,203 211,603 2,860,011 ........................ 8,437,348 renewed in this notice, FinCEN generally does not intend to estimate burden hours and cost applicable to these two key elements in the future supplemental annual PRA burden. The future supplemental annual PRA burden calculation will include the estimated burden and cost to implement the other two key elements of an AML program ((c) BSA training, and (d) independent audit) relating to the regulations and corresponding OMB control numbers being renewed in this notice. The future supplemental annual PRA burden calculation also will include the estimated burden and cost for a mutual fund to implement CDD, because CDD is a requirement in the mutual fund AML program regulations, which are being renewed in this notice. To further clarify, below are (1) a list of actions FinCEN intends to include in a future supplemental annual PRA burden estimate relating to the regulations and OMB control numbers renewed in this notice, and (2) a list of actions FinCEN intends to cover in OMB control number renewals associated with other BSA regulatory requirements. (a) FinCEN intends to include the following within a future supplemental annual PRA burden estimate: i. Any generic BSA-related education and training provided to all levels of the organization, and any training provided to appropriate personnel on BSA issues in excess of that required by their jobspecific responsibilities under their financial institution’s the AML program. ii. The burden and cost of any internal or external independent review of compliance with BSA-specific obligations. iii. The annual burden and cost of the implementation of CDD requirements for mutual funds, only. The CDD requirements include the implementation of risk-based procedures for conducting ongoing customer due diligence, including (a) understanding the nature and purpose of customer relationships for the purpose of developing a customer risk profile, and (b) conducting ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information, such as information about the beneficial ownership of legal entity customers. (b) FinCEN does not intend to include the following as part of a future supplemental annual PRA burden estimate: i. The annual PRA burden and cost of the policies, procedures, and internal controls established in the AML program to ensure compliance with the BSA; 30 ii. the designation of a person to ensure day to day compliance with the financial institution’s AML program and the BSA; 31 and iii. AML education and training provided to personnel relating to their job specific responsibilities.32 FinCEN does not have the necessary information to provide a tentative estimate of these supplemental annual maintains for the various BSA regulatory requirements because those requirements necessitate that internal controls be put in place. 31 As noted above, the burden hours and cost of a BSA compliance officer will be accounted for individually across all of the 42 OMB control numbers FinCEN maintains for the various BSA regulatory requirements because those requirements necessitate that a BSA compliance officer be designated. 32 As noted above, generic BSA-related training provided to all levels of the organization will be included in future burden and cost estimates corresponding to the OMB control numbers being renewed in this notice. Job-specific training related to specific BSA requirements, will be covered in the OMB control numbers corresponding to those specific BSA requirements. PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 E:\FR\FM\13AUN1.SGM 13AUN1 49424 Federal Register / Vol. 85, No. 157 / Thursday, August 13, 2020 / Notices PRA hourly burdens and costs within the current notice. FinCEN also recognizes that it does not have all the necessary information to precisely estimate the traditional annual PRA burden. For that reason, FinCEN is relying on estimates used in prior renewals of OMB control numbers and applicable regulations. FinCEN further recognizes that after receiving public comments, the burden and cost estimates for the traditional annual PRA burden may vary significantly. FinCEN intends to conduct more granular studies of the actions included in the proposed scope of a supplemental annual PRA burden in the near future, to arrive at accurate estimates of net BSA hourly burden and cost.33 The data obtained in these studies also may result in a significant variation in the estimated traditional annual PRA hourly burden. An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Records required to be retained under the BSA must be retained for five years. Estimated Recordkeeping Burden: Due to the different scope and criteria used for the estimate, the average estimated annual traditional PRA burden, measured in hours per respondent, is: (Action A) 1 hour per principal financial institution, for maintaining and updating the AML program; (Action B) 5 minutes per financial institution, for storing the written AML program; (Action C) 5 minutes per financial institution, for producing a copy of the AML program if requested by regulatory examiners or law enforcement; (Action D) 1 hour per mutual fund, for securing approval of the AML program by the board of directors or trustees; and (Action E) 2 minutes per provider or seller of prepaid access, for obtaining, verifying, and maintaining customer identifying information. Estimated Number of Respondents: 305,897, as described in Table 1. Estimated Total Annual Responses: Due to unique requirements in the mutual fund and MSB AML program 33 Net hourly burden and cost are the burden and cost a financial institution incurs to comply with requirements that are unique to the BSA, and that do not support any other business purpose or regulatory obligation of the financial institution. Burden for purposes of the PRA does not include the time and financial resources needed to comply with an information collection if the time and resources are for things a business (or other person) does in the ordinary course of its activities if the agency demonstrates that the recordkeeping activities needed to comply are usual and customary. 5 CFR 1320.3(b)(2). VerDate Sep<11>2014 17:16 Aug 12, 2020 Jkt 250001 regulations, each of the five actions listed below impact a different estimated number of financial institutions as follows: (1) 76,736 (all financial institutions except agent MSBs) for the maintaining the written AML Program; (2) 305,897 (total number of financial institutions) for storing the written AML program; (3) 305,897 (total number of financial institutions) for producing a copy of the written AML program if requested by regulatory examiners or law enforcement; (4) 1,591 (number of mutual funds) for securing approval of an AML program by the board of directors or trustees; and (5) 2,600,000 (number of new prepaid access arrangements added per year) for providers and sellers of prepaid access for obtaining, verifying, and maintaining customer identifying information. Estimated Total Annual Recordkeeping Burden: The estimated total annual PRA burden is 215,976 hours, as described in Table 2. Estimated Total Annual Recordkeeping Cost: The cost of the estimated total annual PRA is $8,437,348, as described in Table 6. Part 4. Request for Comments (a) Specific request for comments on the revised traditional annual PRA hourly burden and cost estimates. FinCEN invites comments on any aspect of the revision to the traditional annual PRA burden, as described in Part 2 of this notice. In particular, FinCEN seeks comments on the adequacy of (i) the estimated number of financial institutions, by type, covered by this notice; (ii) the assumptions FinCEN employed to estimate the burden; (iii) the estimated number of burden hours attributed to each action set out in Table 2; (iv) the levels of the organization of the financial institution participating in such action, their estimated hourly remuneration, and the estimated proportion of time each level participated in each portion of the burden; and (v) the estimated number of new prepaid access arrangements established on an annual basis. FinCEN encourages commenters to include any publicly available source for alternative estimates or methodologies. (b) Specific requests for comments on the proposed criteria for determining the scope of a future traditional and supplemental annual PRA hourly burden and cost estimate. FinCEN invites comments on any aspect of the criteria for a future estimate of the traditional and supplemental annual PRA hourly burden and cost, as described in Part 3 PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 of this notice. In particular, FinCEN seeks comments on the following: (i) Is it realistic to estimate that the PRA hourly burden and cost to implement policies, procedures, and internal controls to ensure compliance with BSA regulations and maintain a BSA compliance officer will be adequately reflected by estimating (a) the hourly burden and cost attributed to internal controls, and (b) the BSA compliance officer’s time across each of the specific BSA requirements, such as reports of transactions in currency, and reports of suspicious transactions. (ii) Specific request for comments on the appropriate criteria, methodology, and questionnaire required to obtain information required for a realistic estimate of the future traditional and supplemental annual PRA hourly burden and cost. For example, as it relates to training, independent review, and maintaining and updating the AML program: Training: (1) How much time is spent on creating and implementing the AML training plan? (2) How much time is spent on delivering instructor led training or creating web- based training? (3) How much time does the financial institution’s compliance department spend on creating AML related training content, or is the training function conducted by a team outside of the financial institution’s compliance department of the financial institution? (4) How much time is spent identifying the proper audience for training? (5) How much time is spent tracking, and reporting on, AML-related training? Independent Review: (1) How much of the financial institution compliance department’s time is spent on responding to inquiries or correcting deficiencies related to the independent review of the AML program? (2) If the independent review is conducted by an internal audit department, how much of the internal audit department’s time is spent creating and implementing the required testing plan for the independent review? Updating and Maintaining a Written AML Program: On average, how many times per year does your financial institution update its AML program? (c) General request for comments. Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval. All comments will become a matter of public record. Comments are invited on: (i) Whether the collection of information is necessary for the proper E:\FR\FM\13AUN1.SGM 13AUN1 Federal Register / Vol. 85, No. 157 / Thursday, August 13, 2020 / Notices performance of the functions of the agency, including whether the information shall have practical utility; (ii) the accuracy of the agency’s estimate of the burden of the collection of information; (iii) ways to enhance the quality, utility, and clarity of the information to be collected; (iv) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and (v) estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information. Dated: August 7, 2020. Michael Mosier, Deputy Director, Financial Crimes Enforcement Network. [FR Doc. 2020–17696 Filed 8–12–20; 8:45 am] BILLING CODE 4810–02–P DEPARTMENT OF THE TREASURY Financial Crimes Enforcement Network Agency Information Collection Activities; Proposed Renewal; Comment Request; Renewal Without Change of the Customer Identification Program Regulatory Requirements for Certain Financial Institutions Financial Crimes Enforcement Network (FinCEN), Treasury. ACTION: Notice and request for comments. AGENCY: As part of its continuing effort to reduce paperwork and respondent burden, FinCEN invites comments on the proposed renewal, without change, of currently approved information collections found in existing Bank Secrecy Act regulations requiring banks, savings associations, credit unions, certain non-federally regulated banks, brokers or dealers in securities, mutual funds, futures commission merchants, and introducing brokers in commodities, to develop and implement customer identification programs designed to allow the financial institution to form a reasonable belief it knows the true identity of each customer. Although no changes are proposed to the information collections themselves, this request covers a future expansion of the scope of the annual burden and cost estimates associated with these regulations. This request for comments is made pursuant to the Paperwork Reduction Act of 1995. DATES: Written comments are welcome, and must be received on or before October 13, 2020. SUMMARY: VerDate Sep<11>2014 17:16 Aug 12, 2020 Jkt 250001 Comments may be submitted by any of the following methods: • Federal E-rulemaking Portal: http:// www.regulations.gov. Follow the instructions for submitting comments. Refer to Docket Number FINCEN–2020– 0010 and the specific Office of Management and Budget (OMB) control numbers 1506–0022, 1506–0026, 1506– 0033, and 1506–0034. • Mail: Policy Division, Financial Crimes Enforcement Network, P.O. Box 39, Vienna, VA 22183. Refer to Docket Number FINCEN–2020–0010 and OMB control numbers 1506–0022, 1506–0026, 1506–0033, and 1506–0034. Please submit comments by one method only. Comments will also be incorporated into FinCEN’s review of existing regulations, as provided by Treasury’s 2011 Plan for Retrospective Analysis of Existing Rules. All comments submitted in response to this notice will become a matter of public record. Therefore, you should submit only information that you wish to make publicly available. FOR FURTHER INFORMATION CONTACT: The FinCEN Regulatory Support Section at 1–800–767–2825 or electronically at frc@fincen.gov. SUPPLEMENTARY INFORMATION: ADDRESSES: I. Statutory and Regulatory Provisions The legislative framework generally referred to as the Bank Secrecy Act (BSA) consists of the Currency and Financial Transactions Reporting Act of 1970, as amended by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act) (Pub. L. 107–56) and other legislation. The BSA is codified at 12 U.S.C. 1829b, 12 U.S.C. 1951–1959, 31 U.S.C. 5311–5314 and 5316–5332, and notes thereto, with implementing regulations at 31 CFR Chapter X. The BSA authorizes the Secretary of the Treasury, inter alia, to require financial institutions to keep records and file reports that are determined to have a high degree of usefulness in criminal, tax, and regulatory matters, or in the conduct of intelligence or counter-intelligence activities, to protect against international terrorism, and to implement anti-money laundering (AML) programs and compliance procedures.1 Regulations implementing Title II of the BSA appear at 31 CFR Chapter X. The authority of the 1 Section 358 of the USA PATRIOT Act added language expanding the scope of the BSA to intelligence or counter-intelligence activities to protect against international terrorism. PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 49425 Secretary to administer the BSA has been delegated to the Director of FinCEN.2 31 U.S.C. 5318(l) requires FinCEN to issue regulations prescribing minimum standards for customer identification programs (CIP) for financial institutions.3 Regulations implementing section 5318(l) are as follows: (i) Banks, savings associations, credit unions, and certain non-federally regulated banks (31 CFR 1020.220); (ii) brokers or dealers in securities (31 CFR 1023.220); (iii) mutual funds (31 CFR 1024.220); and (iv) futures commission merchants and introducing brokers in commodities (31 CFR 1026.220). II. Paperwork Reduction Act of 1995 (PRA) 4 Title: Customer identification programs (CIP) for certain financial institutions (31 CFR 1020.220, 1023.220, 1024.220, and 1026.220). OMB Control Numbers: 1506–0022, 1506–0026, 1506–0033, and 1506– 0034.5 Report Number: Not applicable. Abstract: FinCEN is issuing this notice to renew the OMB control numbers for the CIP regulatory requirements for certain financial institutions. Affected Public: Businesses or other for-profit institutions, and non-profit institutions. Type of Review: • Renewal without change of currently approved information collections. • Propose for review and comment a renewal of the portion of the PRA 2 Treasury Order 180–01 (re-affirmed Jan. 14, 2020). 3 Section 5318(l)(2) prescribes that the regulations, at a minimum, require financial institutions to implement reasonable procedures for: (1) Verifying the identity of any person seeking to open an account, to the extent reasonable and practicable; (2) maintaining records of the information used to verify the person’s identity, including name, address, and other identifying information; and (3) determining whether the person appears on any lists of known or suspected terrorists or terrorist organizations provided to the financial institution by any government agency. Section 5318(l)(3) further directed that the regulations take into consideration the types of accounts maintained by financial institutions, the methods of opening accounts, and the types of identifying information available. 4 Public Law 104–13, 44 U.S.C. 3506(c)(2)(A). 5 The CIP regulatory requirements are currently covered under the following OMB control numbers: 1506–0022 (31 CFR 1026.220—Customer identification programs for futures commission merchants and introducing brokers); 1506–0026 (31 CFR 1020.220—Customer identification programs for banks, savings associations, credit unions, and certain non-federally regulated banks); 1506–0033 (31 CFR 1024.220—Customer identification programs for mutual funds); and 1506–0034 (31 CFR 1023.220—Customer identification programs for brokers or dealers in securities). E:\FR\FM\13AUN1.SGM 13AUN1

Agencies

[Federal Register Volume 85, Number 157 (Thursday, August 13, 2020)]
[Notices]
[Pages 49418-49425]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17696]


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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network


Agency Information Collection Activities; Proposed Renewal; 
Comment Request; Renewal Without Change of Anti-Money Laundering 
Programs for Certain Financial Institutions

AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury.

ACTION: Notice and request for comments.

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SUMMARY: As part of its continuing effort to reduce paperwork and 
respondent burden, FinCEN invites comments on the proposed renewal, 
without change, of currently approved information collections found in 
existing Bank Secrecy Act regulations requiring money services 
businesses, mutual funds, insurance companies, dealers in precious 
metals, precious stones, or jewels, operators of credit card systems, 
and loan or finance companies to develop and implement written anti-
money laundering programs reasonably designed to prevent those 
financial institutions from being used to facilitate money laundering 
and the financing of terrorist activities. Although no changes

[[Page 49419]]

are proposed to the information collections themselves, this request 
for comments covers a future expansion of the scope of the annual 
burden and cost estimates associated with these regulations. This 
request for comments is made pursuant to the Paperwork Reduction Act of 
1995.

DATES: Written comments are welcome, and must be received on or before 
October 13, 2020.

ADDRESSES: Comments may be submitted by any of the following methods:
     Federal E-rulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments. Refer to Docket Number 
FINCEN-2020-0009 and the specific Office of Management and Budget (OMB) 
control numbers 1506-0020, 1506-0030, and 1506-0035.
     Mail: Policy Division, Financial Crimes Enforcement 
Network, P.O. Box 39, Vienna, VA 22183. Refer to Docket Number FINCEN-
2020-0009 and OMB control numbers 1506-0020, 1506-0030, and 1506-0035.
    Please submit comments by one method only. Comments will also be 
incorporated into FinCEN's review of existing regulations, as provided 
by Treasury's 2011 Plan for Retrospective Analysis of Existing Rules. 
All comments submitted in response to this notice will become a matter 
of public record. Therefore, you should submit only information that 
you wish to make publicly available.

FOR FURTHER INFORMATION CONTACT: The FinCEN Regulatory Support Section 
at 1-800-767-2825 or electronically at [email protected].

SUPPLEMENTARY INFORMATION:

I. Statutory and Regulatory Provisions

    The legislative framework generally referred to as the Bank Secrecy 
Act (BSA) consists of the Currency and Financial Transactions Reporting 
Act of 1970, as amended by the Uniting and Strengthening America by 
Providing Appropriate Tools Required to Intercept and Obstruct 
Terrorism Act of 2001 (USA PATRIOT Act) (Pub. L. 107-56) and other 
legislation. The BSA is codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-
1959, 31 U.S.C. 5311-5314 and 5316-5332, and notes thereto, with 
implementing regulations at 31 CFR Chapter X.
    The BSA authorizes the Secretary of the Treasury, inter alia, to 
require financial institutions to keep records and file reports that 
are determined to have a high degree of usefulness in criminal, tax, 
and regulatory matters, or in the conduct of intelligence or counter-
intelligence activities, to protect against international terrorism, 
and to implement anti-money laundering (AML) programs and compliance 
procedures.\1\ Regulations implementing Title II of the BSA appear at 
31 CFR Chapter X. The authority of the Secretary to administer the BSA 
has been delegated to the Director of FinCEN.\2\
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    \1\ Section 358 of the USA PATRIOT Act added language expanding 
the scope of the BSA to intelligence or counter-intelligence 
activities to protect against international terrorism.
    \2\ Treasury Order 180-01 (re-affirmed Jan. 14, 2020).
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    Section 352 of the USA PATRIOT Act added subsection (h) to 31 
U.S.C. 5318 of the BSA. Section 352 mandates that financial 
institutions establish AML programs in order to guard against money 
laundering. Such AML programs must include, at a minimum, the 
following: (a) The development of internal policies, procedures, and 
controls, (b) the designation of a compliance officer, (c) an ongoing 
employee training program, and (d) an independent audit function to 
test programs. Pursuant to section 352, FinCEN issued regulations 
requiring money services businesses (MSBs) (31 CFR 1022.210), mutual 
funds (31 CFR 1024.210), insurance companies (31 CFR 1025.210), dealers 
in precious metals, precious stones, or jewels (31 CFR 1027.210), 
operators of credit card systems (31 CFR 1028.210), and loan or finance 
companies (31 CR 1029.210) to develop and implement written AML 
programs. This notice renews the OMB control numbers associated with 
these specific AML program regulations. The notice is not renewing the 
OMB control numbers associated with other types of financial 
institutions' AML program regulatory requirements at this time for the 
reasons described below.
    On April 29, 2002, FinCEN issued an interim final rule to provide 
guidance to certain financial institutions concerning section 352 of 
the USA PATRIOT Act that requires financial institutions to establish 
AML programs. The interim final rule provided that banks, savings 
associations, credit unions, brokers or dealers in securities, futures 
commission merchants, and casinos would be deemed to be in compliance 
with section 352 if they established and maintained AML programs as 
required by existing FinCEN regulations, or their respective Federal 
regulator or self-regulatory organization (SRO).\3\
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    \3\ 67 FR 21110 (April 29, 2002). This document is available at 
https://www.fincen.gov/sites/default/files/federal_register_notice/352fininst.pdf.
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    Prior to FinCEN issuing the interim final rule in 2002, casinos 
were the only type of financial institution subject to FinCEN AML 
program regulations.\4\ Since 1987, all federally insured depository 
institutions and credit unions have been required to have AML programs. 
In addition, in the interim final rule, FinCEN clarified that it was 
appropriate to implement section 5318(h)(1) of the BSA with respect to 
brokers or dealers in securities and futures commission merchants 
through their respective SROs.\5\ For that reason, FinCEN does not 
maintain OMB control numbers for the AML program regulatory 
requirements of banks, savings associations, credit unions,

[[Page 49420]]

brokers or dealers in securities, and futures commission merchants.
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    \4\ See 58 FR 13538 (March 12, 1993) (final rule imposing AML 
program requirements on casinos) and 59 FR 61660 (Dec. 1, 1994) 
(final rule amending the AML program requirements for casinos to 
requires the training of casino personnel). These documents are 
available at https://www.govinfo.gov/content/pkg/FR-1993-03-12/pdf/FR-1993-03-12.pdf and https://www.govinfo.gov/content/pkg/FR-1994-12-01/html/94-29662.htm, respectively.
    \5\ The casino AML program regulations are covered under FinCEN 
OMB control number 1506-0051, which is not set to expire until 
February 2021. The renewal of that control number, therefore, will 
be addressed later in 2020 in a separate FinCEN notice. Since 1987, 
all federally insured depository institutions and credit unions have 
been required by their Federal regulators to have AML programs. The 
applicable Federal regulator maintains the OMB control number for 
the AML program regulatory requirements of depository institutions 
and credit unions as follows: (a) Office of Comptroller of the 
Currency (AML program regulations at 12 CFR 21.21--covered by OMB 
control number 1557-0180); (b) Federal Reserve Board (AML program 
regulations at 12 CFR 208.63--covered by OMB control number 7100-
0310); (c) Federal Deposit Insurance Corporation (AML program 
regulations at 12 CFR 326.8--covered by OMB control number 3064-
0087); and (d) National Credit Union Administration (AML program 
regulations at 12 CFR 748.2--covered by OMB control number 3133-
0108). In the 2002 interim final rule, FinCEN also noted it was 
appropriate to implement section 5318(h)(1) of the BSA with respect 
to brokers or dealers in securities and futures commission merchants 
through their respective SROs, because the Securities and Exchange 
Commission (SEC) and the Commodity Futures Trade Commission (CFTC) 
and their SROs significantly accelerated the implementation of AML 
programs for their regulated financial institutions. Accordingly, 31 
CFR 1023.210 and 31 CFR 1026.210 provide that brokers or dealers in 
securities, and futures commission merchants and introducing brokers 
in commodities, respectively, will be deemed to be in compliance 
with the requirements of section 5318(h)(1) of the BSA if they 
comply with any applicable regulation of their Federal functional 
regulator governing the establishment and implementation of AML 
programs. The SEC's SRO is the Financial Industry Regulatory 
Authority (FINRA). The AML program requirements for brokers or 
dealers in securities is FINRA Rule 331. The CFTC's SRO is the 
National Futures Association (NFA). The AML program requirements for 
futures commission merchant and introducing brokers in commodities 
is NFA Rule 2-9(c). The SROs are not required to comply with the 
Paperwork Reduction Act of 1995. Therefore, there are no OMB control 
numbers for the AML program regulatory requirements of brokers or 
dealers in securities, futures commission merchants, and introducing 
brokers in commodities.
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II. Paperwork Reduction Act of 1995 (PRA) 6
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    \6\ Public Law 104-13, 44 U.S.C. 3506(c)(2)(A).
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    Title: AML program requirements for MSBs (31 CFR 1022.210), mutual 
funds (31 CFR 1024.210), insurance companies (31 CFR 1025.210), dealers 
in precious metals, precious stones, or jewels (31 CFR 1027.210), 
operators of credit card systems (31 CFR 1028.210), and loan or finance 
companies (31 CFR 1029.210).
    OMB Control Numbers: 1506-0020, 1506-0030, and 1506-0035.\7\
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    \7\ The AML program regulatory requirements are currently 
covered under the following OMB control numbers: 1506-0020 (31 CFR 
1022.210--AML programs for MSBs, 31 CFR 1024.210--AML programs for 
mutual funds, and 31 CFR 1028.210--AML programs for operators of 
credit card systems); 1506-0030 (31 CFR 1027.210--AML programs for 
dealers in precious metals, precious stones, or jewels); and 1506-
0035 (31 CFR 1025.210--AML programs for insurance companies, and 31 
CFR 1029.210--AML programs for loan and finance companies). There is 
no OMB control number associated with 31 CFR 1030.210--AML programs 
for housing government sponsored enterprises, because the purpose of 
the PRA is not to minimize burden on Federal agencies. (44 U.S.C. 
3505(1)).
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    Report Number: Not applicable.
    Abstract: FinCEN is issuing this notice to renew the OMB control 
numbers for the AML program regulatory requirements for certain 
financial institutions.
    Affected Public: Businesses or other for-profit institutions, and 
non-profit institutions.
    Type of Review:
     Renewal without change of currently approved information 
collections.
     Propose for review and comment a renewal of the portion of 
the PRA burden that has been subject to notice and comment in the past 
(the ``traditional annual PRA burden'').
     Propose for review and comment an expansion of the scope 
of the PRA burden in the future (the ``supplemental annual PRA 
burden'').
    Frequency: As required.
    Estimated Number of Respondents: 305,897 financial institutions.\8\
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    \8\ Table 1 below breaks down the types of financial 
institutions covered by this notice.
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    Estimated Recordkeeping Burden: In Part 1 of this notice, FinCEN 
describes the breakdown of the estimated number of financial 
institution, by type, and the primary characteristics of their 
individual AML program requirements. In Part 2, FinCEN proposes for 
review and comment a renewal of the traditional annual PRA burden, 
which includes a scope and methodology similar to that used in the 
past, with a few additional criteria, and the incorporation of cost 
estimates. In past renewals of the OMB control numbers addressed in 
this document FinCEN estimated the hourly burden of (a) documenting an 
AML program for each type of financial institution, and (b) obtaining 
and verifying the identity of customers at the moment of establishing 
the initial relationship for providers and sellers of prepaid access 
only.\9\ The additional criteria and the methodology for estimating 
cost are described in further detail in Part 2. In Part 3, FinCEN 
proposes for review and comment a method to estimate the burden and 
cost of a future estimate of a supplemental annual PRA burden. Finally, 
in Part 4, FinCEN solicits input from the public about (a) the accuracy 
of the estimate of the traditional annual PRA burden; (b) the method 
proposed for the calculation of a future supplemental annual PRA 
burden; (c) the criteria, metrics, and questions FinCEN should take 
into consideration when researching the information required to 
determine the future supplemental annual PRA burden estimate; and (d) 
any other comments about the regulations and the proposed current and 
future burden and cost estimates of these requirements the public 
wishes to make.
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    \9\ The MSB AML program regulations have a unique requirement. 
Specifically, 31 CFR 1022.210(d)(1)(iv) provides that a MSB that is 
a provider or seller of prepaid access must establish procedures to 
verify the identity of a person who obtains prepaid access under a 
prepaid program and obtain identifying information concerning such a 
person, including name, date of birth, address, and identification 
number. Sellers of prepaid access must also establish procedures to 
verify the identity of a person who obtains prepaid access to funds 
that exceed $10,000 during any one day and obtain identifying 
information concerning such a person, including name, date of birth, 
address, and identification number.
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Part 1. Breakdown of Financial Institutions Covered by This Notice

    The breakdown  of financial institutions, by type, covered by this 
notice, is reflected in Table 1 below:
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    \10\ The definition of MSB covers both principal MSBs and 
agents. Under 31 CFR 1022.210(d)(1)(iii), a person that is a MSB 
solely because it is an agent for another MSB and the MSB for which 
it serves as an agent (the principal MSB), may by agreement allocate 
between them responsibility for developing the policies, procedures, 
and internal controls of the AML program. However, each MSB remains 
solely responsible for the actual implementation of an effective AML 
program.
    \11\ FinCEN's MSB registration database.
    \12\ Id.
    \13\ Based on estimates provided for the 2018 notice to renew 
OMB control number 1506-0033, 83 FR 46011 (Sept. 11, 2018).
    \14\ Based on estimates provided for the 2018 notice to renew 
OMB control number 1506-0035 (83 FR 34298 (July 19, 2018)).
    \15\ Based on estimates provided for the 2018 notice to renew 
OMB control number 1506-0030 (83 FR 46014 (Sept. 11, 2018)).
    \16\ Based on estimates provided for the 2018 notice to renew 
OMB control number 1506-0020 (83 FR 42558 (Aug. 22, 2018)).
    \17\ See supra note 14.

 Table 1--Breakdown of Financial Institutions Covered by This Notice, by
                                  Type
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                                                               Number of
Type of financial institution                                  financial
                                                              institutio
                                                                      ns
------------------------------------------------------------------------
Principal MSBs \10\.........................................        \11\
                                                                  22,939
----------------------------------------------------
    Providers or sellers of prepaid access.........    1,632
    Others types of principal MSBs.................   21,307
-------------------------------------------------------------
Agent MSBs..................................................        \12\
                                                                 229,161
Mutual funds................................................  \13\ 1,591
Insurance companies.........................................  \14\ 1,200
Dealers in precious metals, stones, and jewels..............        \15\
                                                                  20,000
Operators of credit card systems............................      \16\ 6
Loans or finance companies..................................        \17\
                                                                  31,000
                                                    --------------------
    Total...................................................     305,897
------------------------------------------------------------------------


[[Page 49421]]

    Section 352 requires that an AML program must encompass four key 
elements: (a) Establishing policies, procedures, and internal controls 
reasonably designed to assurance compliance with the BSA; (b) 
designating a person to ensure day to day compliance with the AML 
program and the BSA; (c) providing education and training to 
appropriate personnel concerning their responsibilities under the AML 
program; and (d) implementing an independent review to monitor and 
maintain an adequate AML program.\18\
---------------------------------------------------------------------------

    \18\ Although FinCEN is providing information about burden and 
cost with respect to the four key elements of an AML program, FinCEN 
wants to emphasize that the four key elements of an AML program are 
statutory requirements.
---------------------------------------------------------------------------

    The AML program regulations for MSBs, mutual funds, insurance 
companies, dealers in precious metals, precious stones, or jewels, 
operators of credit card systems, and loan or finance companies require 
these financial institutions to implement an AML program that is 
reasonably designed to prevent the financial institution from being 
used to facilitate money laundering and terrorist financing. The AML 
program must be in writing and must be commensurate with the financial 
institution's risk profile.\19\
---------------------------------------------------------------------------

    \19\ The AML program regulations for mutual funds, specifically, 
also require the program to be approved in writing by their board of 
directors or trustees. 31 CFR 1024.210(a).
---------------------------------------------------------------------------

    The AML program regulations for mutual funds, for which the 
corresponding OMB control number is being renewed as part of this 
notice, include customer due diligence (CDD) requirements.\20\ FinCEN 
will consider a mutual fund's CDD requirements as part of the future 
supplemental annual PRA burden in this notice.
---------------------------------------------------------------------------

    \20\ 31 CFR 1024.220.
---------------------------------------------------------------------------

Part 2. Traditional Annual PRA Burden and Cost

    The scope of the traditional annual PRA burden and cost estimates 
of the AML program in this renewal is limited to: Maintaining and 
updating the written AML program (Action A); storing the written AML 
program (Action B); producing a copy of the written AML program if 
requested by regulatory examiners or law enforcement (Action C); for 
mutual funds, securing approval of the AML program by the board of 
directors or trustees (Action D); \21\ and for providers or sellers of 
prepaid access, obtaining, verifying, and maintaining cardholder 
identifying information (Action E).
---------------------------------------------------------------------------

    \21\ The mutual fund AML program regulations are the only AML 
program regulations being renewed in this notice with a regulatory 
requirement to secure board of directors' or trustees' approval of 
the AML program. For that reason, FinCEN is only including the 
burden and cost of the board of directors' or trustees' approval for 
mutual funds in the traditional annual PRA burden and cost estimate. 
FinCEN recognizes, however, that the other financial institutions 
covered by this notice may also get their board or directors or 
trustees to approve their AML programs as a best practice.
---------------------------------------------------------------------------

    For purposes of the estimate of the AML program traditional annual 
PRA burden, FinCEN has made the following assumptions:
    (a) In all cases, agent MSBs agree to abide by the policies, 
procedures, and internal controls established by their principal MSBs.
    (b) Principal MSBs establish minimum training and independent 
review standards for their agents.\22\
---------------------------------------------------------------------------

    \22\ According to FIN-2016-G001, ``Guidance on Existing AML 
Program Rule Compliance Obligations for MSB Principals with Respect 
to Agent Monitoring,'' (March 11, 2016), MSB principals are required 
to develop and implement risk-based policies, procedures, and 
internal controls that ensure adequate ongoing monitoring of agent 
activity, as part of the principal's implementation of its AML 
program. Imposing a minimum level of general training and a minimum 
frequency of independent review allows principal MSBs to standardize 
in part these agent monitoring responsibilities. This document is 
available at https://www.fincen.gov/resources/statutes-regulations/guidance/guidance-existing-aml-program-rule-compliance-obligations.
---------------------------------------------------------------------------

    (c) The written AML program is stored as an electronic file. The 
estimated annual burden (5 minutes per financial institution) 
represents the administrative burden involved in processing the storage 
of the written program, and not just the time of actual electronic 
storage, which would be nearly instantaneous.
    (d) Producing the written AML program electronically to regulatory 
or law enforcement agencies, upon their request. FinCEN estimates the 
annual burden of producing the written program at 5 minutes per 
financial institution. The estimated annual burden represents the 
administrative burden involved in producing the program upon request, 
and not just the time required to make the program available to the 
requestor for inspection (for example, the actual electronic 
transmission), which would be nearly instantaneous.
    (e) The estimated number of prepaid access arrangements established 
annually remains at approximately 2.6 million. The collection and 
storage of cardholder identification information is automated.\23\
---------------------------------------------------------------------------

    \23\ 83 FR 42558 (Aug. 22, 2018).
    \24\ As set out in Table 1 above.
---------------------------------------------------------------------------

    The estimated burden associated with each portion of the 
traditional annual PRA estimate is as follows:

                                   Table 2--Burden Associated With Each Portion of the Traditional Annual PRA Estimate
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                             Number of
                                                                                                    Type of financial        financial     Total  hourly
                Action                      Instances per year          Time per  instance             institution         institutions       burden
                                                                                                                               \24\
--------------------------------------------------------------------------------------------------------------------------------------------------------
A. Maintaining and updating the         1 per financial            1 hour.....................  All except agent MSBs...          76,736          76,736
 written AML program.                    institution.
B. Storing the written AML program....  1 per financial            5 minutes..................  All.....................         305,897          25,491
                                         institution.
C. Producing the AML program upon       1 per financial            5 minutes..................  All.....................         305,897          25,491
 request.                                institution.
D. Board of directors/trustees          1 per financial            1 hour.....................  Mutual funds............           1,591           1,591
 approval of the AML program.            institution.
E. Obtaining, verifying, and storing    2.6 million (once per      2 minutes..................  Providers or sellers of            1,632          86,667
 cardholder identifying information.     card).                                                  prepaid access.
                                                                                                                         -------------------------------
    Total Hourly Burden...............  .........................  ...........................  ........................  ..............         215,976
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 49422]]

    FinCEN's estimate for the total traditional hourly annual PRA 
burden is 215,976 hours.
    FinCEN identified four roles and corresponding staff positions 
involved in maintaining an AML program in order to estimate the hourly 
costs associated with the burden hour estimates calculated in this 
part. Those are: (i) General oversight (board of directors/trustees 
approval of the AML program); (ii) general supervision (providing 
process oversight); (iii) direct supervision (reviewing operational-
level work and cross-checking all or a sample of the work product 
against their supporting documentation); and (iv) clerical work 
(engaging in research and administrative review and filing and 
producing the AML program on request).
    FinCEN calculated the fully-loaded hourly wage for each of these 
four roles by taking the median wage as estimated by the U.S. Bureau of 
Labor Statistics (BLS), and computing an additional benefits cost as 
follows: \25\
---------------------------------------------------------------------------

    \25\ U.S. Bureau of Labor Statistics, Occupational Employment 
Statistics-National, May 2019, available at https://www.bls.gov/oes/tables.htm. The most recent data from the BLS corresponds to May 
2019. For the benefits component of total compensation, see U.S. 
Bureau of Labor Statistics, Employer's Cost per Employee 
Compensation as of December 2019, available at https://www.bls.gov/news.release/ecec.nr0.htm. The ratio between benefits and wages for 
financial activities, credit intermediation and related activities 
is $15.95 (hourly benefits)/$32.05 (hourly wages) = 0.50. The 
benefit factor is 1 plus the benefit/wages ratio, or 1.50. 
Multiplying each hourly wage by the benefit factor produces the 
fully-loaded hourly wage per position.
    \26\ FinCEN recognizes that a board of directors/trustees would 
be on a different pay scale than a chief executive officer, however, 
chief executive officer is the highest paid category in the BLS 
Occupational Employment Statistics. For that reason, FinCEN is 
conservatively estimating the highest wage rate available for its 
cost analysis.

           Table 3--Total Hourly Remuneration (Fully-Loaded Hourly Wage) per Role and BLS Job Position
----------------------------------------------------------------------------------------------------------------
                                                                  Median  hourly      Benefit      Fully-loaded
              Role                 BLS-code        BLS-name            wage           factor        hourly wage
----------------------------------------------------------------------------------------------------------------
Board of directors/trustees....      11-1010  Chief Executive             $88.68            1.50       * $133.00
                                               \26\.
General supervision............      11-3031  Financial Manager.           62.45            1.50           93.68
Direct supervision.............      13-1041  Compliance Officer           33.20            1.50           49.80
Clerical work (research,             43-3099  Financial Clerk...           20.40            1.50           30.60
 review, and filing and
 producing the program upon
 request).
----------------------------------------------------------------------------------------------------------------
* $133.02 rounded to $133.00.

    FinCEN estimates that, in general and on average,\27\ each role 
would spend different amounts of time on each portion of the 
traditional annual PRA burden, as follows:
---------------------------------------------------------------------------

    \27\ By ``in general,'' FinCEN is speaking without regard to 
outliers (e.g., financial institutions with AML programs with 
complexities that are uncommonly higher or lower than those of the 
population at large). By ``on average,'' FinCEN means the mean of 
the distribution of each subset of the population.
---------------------------------------------------------------------------

    For Action A set out in Table 2 above, annually maintaining and 
updating the AML program documentation, the cost of each hour of burden 
is estimated to be $48.00, as shown in Table 4 below. Action A applies 
to all financial institutions covered by this notice, except agent 
MSBs.

                               Table 4--Weighted Average Hourly Cost of Maintaining and Updating AML Program Documentation
--------------------------------------------------------------------------------------------------------------------------------------------------------
            General supervision                         Direct supervision                      Clerical work (case review)
-----------------------------------------------------------------------------------------------------------------------------------   Weighted average
       % time             Hourly  cost             % time             Hourly  cost             % time             Hourly  cost           hourly cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
              10%                 $9.37                   60%                $29.88                   30%                 $9.18              $48.00 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
*$48.43 rounded to $48.00.

    For Actions B, C, and E set out in Table 2 above, the cost of each 
hour of burden is estimated to be $33.00, as shown in Table 5 below:
     Action B--storing the AML program. (Applies to all 
financial institutions covered by this notice).
     Action C--producing of the AML program upon request. 
(Applies to all financial institutions covered by this notice).
     Action E--obtaining, verifying, and storing prepaid access 
customer identifying information. (Only applies to providers and 
sellers of prepaid access).

  Table 5--Weighted Average Hourly Cost of Storing and Producing AML Program Documentation Upon Request, and Obtaining, Verifying, and Storing Prepaid
                                                         Access Customer Identifying Information
--------------------------------------------------------------------------------------------------------------------------------------------------------
            General supervision                         Direct supervision                     Clerical work (recordkeeping)
-----------------------------------------------------------------------------------------------------------------------------------   Weighted average
       % time              Hourly cost             % time              Hourly cost             % time              Hourly cost           hourly cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
               1%                 $0.94                    9%                 $4.48                   90%                $27.54              $33.00 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
*$32.96 rounded to $33.00.

    For Action D set out in Table 2 above, approval of a mutual fund's 
AML program by the board of directors or trustees, the cost of each 
hour of burden would be $133.00, as shown in Table 3

[[Page 49423]]

above. Action D only applies to mutual funds.\28\
---------------------------------------------------------------------------

    \28\ See supra note 21.
---------------------------------------------------------------------------

    The total cost of the traditional annual PRA burden would be 
$8,437,348, as reflected in Table 6 below:

                              Table 6--Total Cost of Traditional Annual PRA Burden
----------------------------------------------------------------------------------------------------------------
                                       Total burden                   Hourly cost
                                         in hours    --------------------------------------------
               Action                ----------------                                               Total cost
                                         (Table 2)           $                  Source
----------------------------------------------------------------------------------------------------------------
A. Maintaining and updating the               76,736          $48.00  Table 4...................      $3,683,328
 written AML program.
B. Storing the written AML program..          25,491           33.00  Table 5...................         841,203
C. Producing the written AML program          25,491           33.00  Table 5...................         841,203
 upon request.
D. Board of directors/trustees                 1,591          133.00  Table 3...................         211,603
 approval of the AML program.
E. Obtaining, verifying, and storing          86,667           33.00  Table 5...................       2,860,011
 prepaid access customer identifying
 information.
                                     ---------------------------------------------------------------------------
    Total Cost......................  ..............  ..............  ..........................       8,437,348
----------------------------------------------------------------------------------------------------------------

Part 3. Supplemental Annual PRA Burden

    In the future, FinCEN intends to add a supplemental annual PRA 
burden calculation for the AML program regulations covered by this 
notice, reflecting the annual PRA burden and cost involved in 
implementing certain actions that are part of the four key elements of 
an AML program. As noted above, for all of the financial institutions 
covered by this notice, an AML program must encompass four key 
elements: (a) Establishing policies, procedures, and internal controls 
reasonably designed to ensure compliance with the BSA; (b) designating 
a person to ensure day to day compliance with the AML program and the 
BSA; (c) providing education and training to appropriate personnel 
concerning their responsibilities under the AML program; and (d) 
implementing an independent review to monitor and maintain an adequate 
AML program.\29\
---------------------------------------------------------------------------

    \29\ Although FinCEN is providing information about burden and 
cost with respect to the four key elements of an AML program, FinCEN 
wants to emphasize that the four key elements of an AML program are 
statutory requirements.
---------------------------------------------------------------------------

    The burden hours and cost of two of the key elements of an AML 
program (internal controls, and designation of a BSA compliance 
officer) are accounted for individually across all of the 42 OMB 
control numbers FinCEN maintains for the various BSA regulatory 
requirements because those requirements necessitate that internal 
controls be put in place and that a BSA compliance officer be 
designated. For that reason, for the OMB control numbers and related 
regulations renewed in this notice, FinCEN generally does not intend to 
estimate burden hours and cost applicable to these two key elements in 
the future supplemental annual PRA burden.
    The future supplemental annual PRA burden calculation will include 
the estimated burden and cost to implement the other two key elements 
of an AML program ((c) BSA training, and (d) independent audit) 
relating to the regulations and corresponding OMB control numbers being 
renewed in this notice. The future supplemental annual PRA burden 
calculation also will include the estimated burden and cost for a 
mutual fund to implement CDD, because CDD is a requirement in the 
mutual fund AML program regulations, which are being renewed in this 
notice.
    To further clarify, below are (1) a list of actions FinCEN intends 
to include in a future supplemental annual PRA burden estimate relating 
to the regulations and OMB control numbers renewed in this notice, and 
(2) a list of actions FinCEN intends to cover in OMB control number 
renewals associated with other BSA regulatory requirements.
    (a) FinCEN intends to include the following within a future 
supplemental annual PRA burden estimate:
    i. Any generic BSA-related education and training provided to all 
levels of the organization, and any training provided to appropriate 
personnel on BSA issues in excess of that required by their job-
specific responsibilities under their financial institution's the AML 
program.
    ii. The burden and cost of any internal or external independent 
review of compliance with BSA-specific obligations.
    iii. The annual burden and cost of the implementation of CDD 
requirements for mutual funds, only. The CDD requirements include the 
implementation of risk-based procedures for conducting ongoing customer 
due diligence, including (a) understanding the nature and purpose of 
customer relationships for the purpose of developing a customer risk 
profile, and (b) conducting ongoing monitoring to identify and report 
suspicious transactions and, on a risk basis, to maintain and update 
customer information, such as information about the beneficial 
ownership of legal entity customers.
    (b) FinCEN does not intend to include the following as part of a 
future supplemental annual PRA burden estimate:
    i. The annual PRA burden and cost of the policies, procedures, and 
internal controls established in the AML program to ensure compliance 
with the BSA; \30\
---------------------------------------------------------------------------

    \30\ As noted above, the burden hours and cost of internal 
controls will be accounted for individually across all of the 42 OMB 
control numbers FinCEN maintains for the various BSA regulatory 
requirements because those requirements necessitate that internal 
controls be put in place.
---------------------------------------------------------------------------

    ii. the designation of a person to ensure day to day compliance 
with the financial institution's AML program and the BSA; \31\ and
---------------------------------------------------------------------------

    \31\ As noted above, the burden hours and cost of a BSA 
compliance officer will be accounted for individually across all of 
the 42 OMB control numbers FinCEN maintains for the various BSA 
regulatory requirements because those requirements necessitate that 
a BSA compliance officer be designated.
---------------------------------------------------------------------------

    iii. AML education and training provided to personnel relating to 
their job specific responsibilities.\32\
---------------------------------------------------------------------------

    \32\ As noted above, generic BSA-related training provided to 
all levels of the organization will be included in future burden and 
cost estimates corresponding to the OMB control numbers being 
renewed in this notice. Job-specific training related to specific 
BSA requirements, will be covered in the OMB control numbers 
corresponding to those specific BSA requirements.
---------------------------------------------------------------------------

    FinCEN does not have the necessary information to provide a 
tentative estimate of these supplemental annual

[[Page 49424]]

PRA hourly burdens and costs within the current notice. FinCEN also 
recognizes that it does not have all the necessary information to 
precisely estimate the traditional annual PRA burden. For that reason, 
FinCEN is relying on estimates used in prior renewals of OMB control 
numbers and applicable regulations. FinCEN further recognizes that 
after receiving public comments, the burden and cost estimates for the 
traditional annual PRA burden may vary significantly. FinCEN intends to 
conduct more granular studies of the actions included in the proposed 
scope of a supplemental annual PRA burden in the near future, to arrive 
at accurate estimates of net BSA hourly burden and cost.\33\ The data 
obtained in these studies also may result in a significant variation in 
the estimated traditional annual PRA hourly burden.
---------------------------------------------------------------------------

    \33\ Net hourly burden and cost are the burden and cost a 
financial institution incurs to comply with requirements that are 
unique to the BSA, and that do not support any other business 
purpose or regulatory obligation of the financial institution. 
Burden for purposes of the PRA does not include the time and 
financial resources needed to comply with an information collection 
if the time and resources are for things a business (or other 
person) does in the ordinary course of its activities if the agency 
demonstrates that the recordkeeping activities needed to comply are 
usual and customary. 5 CFR 1320.3(b)(2).
---------------------------------------------------------------------------

    An Agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless the collection of 
information displays a valid OMB control number. Records required to be 
retained under the BSA must be retained for five years.
    Estimated Recordkeeping Burden: Due to the different scope and 
criteria used for the estimate, the average estimated annual 
traditional PRA burden, measured in hours per respondent, is: (Action 
A) 1 hour per principal financial institution, for maintaining and 
updating the AML program; (Action B) 5 minutes per financial 
institution, for storing the written AML program; (Action C) 5 minutes 
per financial institution, for producing a copy of the AML program if 
requested by regulatory examiners or law enforcement; (Action D) 1 hour 
per mutual fund, for securing approval of the AML program by the board 
of directors or trustees; and (Action E) 2 minutes per provider or 
seller of prepaid access, for obtaining, verifying, and maintaining 
customer identifying information.
    Estimated Number of Respondents: 305,897, as described in Table 1.
    Estimated Total Annual Responses: Due to unique requirements in the 
mutual fund and MSB AML program regulations, each of the five actions 
listed below impact a different estimated number of financial 
institutions as follows:
    (1) 76,736 (all financial institutions except agent MSBs) for the 
maintaining the written AML Program;
    (2) 305,897 (total number of financial institutions) for storing 
the written AML program;
    (3) 305,897 (total number of financial institutions) for producing 
a copy of the written AML program if requested by regulatory examiners 
or law enforcement;
    (4) 1,591 (number of mutual funds) for securing approval of an AML 
program by the board of directors or trustees; and
    (5) 2,600,000 (number of new prepaid access arrangements added per 
year) for providers and sellers of prepaid access for obtaining, 
verifying, and maintaining customer identifying information.
    Estimated Total Annual Recordkeeping Burden: The estimated total 
annual PRA burden is 215,976 hours, as described in Table 2.
    Estimated Total Annual Recordkeeping Cost: The cost of the 
estimated total annual PRA is $8,437,348, as described in Table 6.

Part 4. Request for Comments

    (a) Specific request for comments on the revised traditional annual 
PRA hourly burden and cost estimates.
    FinCEN invites comments on any aspect of the revision to the 
traditional annual PRA burden, as described in Part 2 of this notice. 
In particular, FinCEN seeks comments on the adequacy of (i) the 
estimated number of financial institutions, by type, covered by this 
notice; (ii) the assumptions FinCEN employed to estimate the burden; 
(iii) the estimated number of burden hours attributed to each action 
set out in Table 2; (iv) the levels of the organization of the 
financial institution participating in such action, their estimated 
hourly remuneration, and the estimated proportion of time each level 
participated in each portion of the burden; and (v) the estimated 
number of new prepaid access arrangements established on an annual 
basis. FinCEN encourages commenters to include any publicly available 
source for alternative estimates or methodologies.
    (b) Specific requests for comments on the proposed criteria for 
determining the scope of a future traditional and supplemental annual 
PRA hourly burden and cost estimate.
    FinCEN invites comments on any aspect of the criteria for a future 
estimate of the traditional and supplemental annual PRA hourly burden 
and cost, as described in Part 3 of this notice. In particular, FinCEN 
seeks comments on the following:
    (i) Is it realistic to estimate that the PRA hourly burden and cost 
to implement policies, procedures, and internal controls to ensure 
compliance with BSA regulations and maintain a BSA compliance officer 
will be adequately reflected by estimating (a) the hourly burden and 
cost attributed to internal controls, and (b) the BSA compliance 
officer's time across each of the specific BSA requirements, such as 
reports of transactions in currency, and reports of suspicious 
transactions.
    (ii) Specific request for comments on the appropriate criteria, 
methodology, and questionnaire required to obtain information required 
for a realistic estimate of the future traditional and supplemental 
annual PRA hourly burden and cost. For example, as it relates to 
training, independent review, and maintaining and updating the AML 
program:
    Training:
    (1) How much time is spent on creating and implementing the AML 
training plan?
    (2) How much time is spent on delivering instructor led training or 
creating web- based training?
    (3) How much time does the financial institution's compliance 
department spend on creating AML related training content, or is the 
training function conducted by a team outside of the financial 
institution's compliance department of the financial institution?
    (4) How much time is spent identifying the proper audience for 
training?
    (5) How much time is spent tracking, and reporting on, AML-related 
training?
    Independent Review:
    (1) How much of the financial institution compliance department's 
time is spent on responding to inquiries or correcting deficiencies 
related to the independent review of the AML program?
    (2) If the independent review is conducted by an internal audit 
department, how much of the internal audit department's time is spent 
creating and implementing the required testing plan for the independent 
review?
    Updating and Maintaining a Written AML Program: On average, how 
many times per year does your financial institution update its AML 
program?
    (c) General request for comments.
    Comments submitted in response to this notice will be summarized 
and/or included in the request for OMB approval. All comments will 
become a matter of public record. Comments are invited on: (i) Whether 
the collection of information is necessary for the proper

[[Page 49425]]

performance of the functions of the agency, including whether the 
information shall have practical utility; (ii) the accuracy of the 
agency's estimate of the burden of the collection of information; (iii) 
ways to enhance the quality, utility, and clarity of the information to 
be collected; (iv) ways to minimize the burden of the collection of 
information on respondents, including through the use of automated 
collection techniques or other forms of information technology; and (v) 
estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of services to provide information.

    Dated: August 7, 2020.
Michael Mosier,
Deputy Director, Financial Crimes Enforcement Network.
[FR Doc. 2020-17696 Filed 8-12-20; 8:45 am]
BILLING CODE 4810-02-P