Agency Information Collection Activities; Proposed Renewal; Comment Request; Renewal Without Change of Anti-Money Laundering Programs for Certain Financial Institutions, 49418-49425 [2020-17696]
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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.
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[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:
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[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:
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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: https://
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
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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.
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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.
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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
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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
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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.
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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
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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
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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.
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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
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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.
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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
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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.
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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).
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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
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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
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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:
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17:16 Aug 12, 2020
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Comments may be
submitted by any of the following
methods:
• Federal E-rulemaking Portal: https://
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.
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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).
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]]>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]
-----------------------------------------------------------------------
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.
-----------------------------------------------------------------------
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: https://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).
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\3\ 67 FR 21110 (April 29, 2002). This document is available at
https://www.fincen.gov/sites/default/files/federal_register_notice/352fininst.pdf.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
II. Paperwork Reduction Act of 1995 (PRA) 6
---------------------------------------------------------------------------
\6\ Public Law 104-13, 44 U.S.C. 3506(c)(2)(A).
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\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)).
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\8\ Table 1 below breaks down the types of financial
institutions covered by this notice.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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:
---------------------------------------------------------------------------
\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.
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\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).
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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
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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
