Exemptions to Suspicious Activity Report Requirements, 15323-15332 [2022-05521]
Download as PDF
<![CDATA[
Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Rules and Regulations
opinion, qualified opinion, adverse
opinion, or disclaimer of opinion);
(vi) A statement as to whether the
audit disclosed any audit findings that
the auditor is required to report under
§ 910.516 Audit findings, paragraph (a);
(vii) Not applicable.
(viii) Not applicable.
(ix) Not applicable.
(2) Findings relating to the financial
Statements (if available) which are
required to be reported in accordance
with GAGAS.
(3) Findings and questioned costs for
DOE awards which must include audit
findings as defined in § 910.516 Audit
findings, paragraph (a).
(i) Audit findings (e.g., internal
control findings, compliance findings,
questioned costs, or fraud) that relate to
the same issue should be presented as
a single audit finding.
(ii) Audit findings that relate to both
the financial statements (if available)
and DOE awards, as reported under
paragraphs (d)(2) and (3) of this section,
respectively, should be reported in both
sections of the schedule. However, the
reporting in one section of the schedule
may be in summary form with a
reference to a detailed reporting in the
other section of the schedule.
(e) Nothing in this part precludes
combining of the audit reporting
required by this section with the
reporting required by § 910.512 Report
submission, paragraph (b), when
allowed by GAGAS.
■ 17. Section 910.519 is revised to read
as follows:
jspears on DSK121TN23PROD with RULES1
§ 910.519
Criteria for Federal program risk.
(a) General. The auditor’s
determination should be based on an
overall evaluation of the risk of
noncompliance occurring that could be
material to the DOE program. The
auditor must consider criteria, such as
described in paragraphs (b), (c), and (d)
of this section, to identify risk in
Federal programs. Also, as part of the
risk analysis, the auditor may wish to
discuss a particular DOE program with
auditee management and DOE.
(b) Current and prior audit
experience. (1) Weaknesses in internal
control over DOE programs would
indicate higher risk. Consideration
should be given to the control
environment over DOE programs and
such factors as the expectation of
management’s adherence to Federal
statutes, regulations, and the terms and
conditions of DOE awards and the
competence and experience of
personnel who administer the DOE
programs.
(i) A DOE program administered
under multiple internal control
VerDate Sep<11>2014
15:55 Mar 17, 2022
Jkt 256001
structures may have higher risk. The
auditor must consider whether
weaknesses are isolated in a single
operating unit (e.g., one college campus)
or pervasive throughout the entity.
(ii) When significant parts of a DOE
program are passed through to
subrecipients, a weak system for
monitoring subrecipients would
indicate higher risk.
(2) Prior audit findings would
indicate higher risk, particularly when
the situations identified in the audit
findings could have a significant impact
on a DOE program or have not been
corrected.
(3) DOE programs not recently
audited as major programs may be of
higher risk than Federal programs
recently audited as major programs
without audit findings.
(c) Oversight exercised by DOE. (1)
Oversight exercised by DOE could be
used to assess risk. For example, recent
monitoring or other reviews performed
by an oversight entity that disclosed no
significant problems would indicate
lower risk, whereas monitoring that
disclosed significant problems would
indicate higher risk.
(2) Federal agencies, with the
concurrence of OMB, may identify
Federal programs that are higher risk.
OMB will provide this identification in
the compliance supplement.
(d) Inherent risk of the Federal
program. (1) The nature of a Federal
program may indicate risk.
Consideration should be given to the
complexity of the program and the
extent to which the Federal program
contracts for goods and services. For
example, Federal programs that disburse
funds through third party contracts or
have eligibility criteria may be of higher
risk. Federal programs primarily
involving staff payroll costs may have
high risk for noncompliance with
requirements of 2 CFR 200.430
Compensation—personal services, but
otherwise be at low risk.
(2) The phase of a Federal program in
its life cycle at the Federal agency may
indicate risk. For example, a new
Federal program with new or interim
regulations may have higher risk than
an established program with time-tested
regulations. Also, significant changes in
Federal programs, statutes, regulations,
or the terms and conditions of Federal
awards may increase risk.
(3) The phase of a Federal program in
its life cycle at the auditee may indicate
risk. For example, during the first and
last years that an auditee participates in
a Federal program, the risk may be
higher due to start-up or closeout of
program activities and staff.
PO 00000
Frm 00007
Fmt 4700
Sfmt 4700
15323
(4) Programs with larger Federal
awards expended would be of higher
risk than programs with substantially
smaller Federal awards expended.
■ 18. Section 910.520 is revised to read
as follows:
§ 910.520
Criteria for a low-risk auditee.
An auditee that meets all of the
following conditions for each of the
preceding two audit periods may qualify
as a low-risk auditee and be eligible for
reduced audit coverage.
(a) Compliance audits were performed
on an annual basis in accordance with
the provisions of this Subpart, including
submitting the data collection form to
DOE within the timeframe specified in
§ 910.512 Report submission. A forprofit entity that has biennial audits
does not qualify as a low-risk auditee.
(b) The auditor’s opinion on whether
the financial statements (if available)
were prepared in accordance with
GAAP, or a basis of accounting required
by state law, and the auditor’s in
relation to opinion on the schedule of
expenditures of DOE awards were
unmodified.
(c) There were no deficiencies in
internal control which were identified
as material weaknesses under the
requirements of GAGAS.
(d) The auditor did not report a
substantial doubt about the auditee’s
ability to continue as a going concern.
(e) None of the DOE programs had
audit findings from any of the following
in either of the preceding two audit
periods:
(1) Internal control deficiencies that
were identified as material weaknesses
in the auditor’s report on internal
control as required under § 910.515
Audit reporting, paragraph (c);
(2) Not applicable.
(3) Not applicable.
[FR Doc. 2022–04240 Filed 3–17–22; 8:45 am]
BILLING CODE 6450–01–P
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Parts 21 and 163
[Docket No. OCC–2020–0037]
RIN 1557–AE77
Exemptions to Suspicious Activity
Report Requirements
Office of the Comptroller of the
Currency (OCC), Treasury.
ACTION: Final rule.
AGENCY:
This final rule modifies the
requirements for national banks and
SUMMARY:
E:\FR\FM\18MRR1.SGM
18MRR1
15324
Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Rules and Regulations
Federal savings associations, including
Federal branches and agencies of foreign
banks licensed or chartered by the OCC,
to file suspicious activity reports
(SARs). It amends the OCC’s SAR
regulations to allow the OCC to issue
exemptions from the requirements of
those regulations upon request from a
financial institution subject to those
regulations. The rule harmonizes the
OCC’s legal authority with the
preexisting exemption authority of the
Financial Crimes Enforcement Network
(FinCEN) of the U.S. Department of the
Treasury. This rule will make it possible
for the OCC to facilitate changes
required by the Anti-Money Laundering
Act of 2020. The final rule will also
make it possible for the OCC to grant
relief to national banks or Federal
savings associations that develop
innovative solutions intended to meet
Bank Secrecy Act requirements more
efficiently and effectively.
DATES:
This rule is effective on May 1,
2022.
Jina
Cheon, Counsel; Henry Barkhausen,
Counsel; or Scott Burnett, Counsel,
Chief Counsel’s Office (202) 649–5490;
Office of the Comptroller of the
Currency, 400 7th Street SW,
Washington, DC 20219.
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:
jspears on DSK121TN23PROD with RULES1
I. Introduction
OCC regulations require national
banks and Federal savings associations
to file suspicious activity reports (SARs)
under certain conditions. These
regulations also provide for (i) board of
director notification; (ii) filing
exceptions; (iii) SAR confidentiality; (iv)
recordkeeping requirements; (v)
supporting documentation
requirements; and (vi) limitations on
liability. Requirements related to SARs
are codified at 12 CFR 21.11 for national
banks and 12 CFR 163.180 for Federal
savings associations. On January 22,
2021, the OCC, the Board of Governors
of the Federal Reserve System (Board),
the Federal Deposit Insurance
Corporation (FDIC), and the National
Credit Union Administration (NCUA)
(collectively, the agencies or Federal
banking agencies) published
substantially similar proposed rules that
would amend their respective SAR
regulations to allow the agencies to
issue exemptions from the requirements
of those regulations.1 The OCC is
adopting its proposed rule in final form.
1 86 FR 6572 (Jan. 22, 2021) (OCC); 86 FR 6576
(Jan. 22, 2021) (Board); 86 FR 6580 (Jan. 22, 2021)
(FDIC); 86 FR 6586 (Jan. 22, 2021) (NCUA).
VerDate Sep<11>2014
15:55 Mar 17, 2022
Jkt 256001
II. Background
The OCC has long required its
regulated institutions to report potential
violations of law arising from
transactions that flow through those
institutions.2 The OCC required such
reporting because fraud, abusive insider
transactions, check-kiting schemes,
money laundering, and other financial
crimes can pose serious threats to a
financial institution’s continued
viability and, if unchecked, can
undermine the public confidence in the
Nation’s financial system generally.3
In 1992 Congress passed the
Annunzio-Wylie Anti-Money
Laundering Act, which redesigned the
criminal referral process applicable to
financial institutions including OCCsupervised entities and made the
reporting of certain suspicious
transactions a requirement of the Bank
Secrecy Act (BSA).4 The Act permitted
the U.S. Department of the Treasury
(Treasury) to require financial
institutions, including national banks
and Federal savings associations, to
‘‘report any suspicious transaction
relevant to a possible violation of law or
regulation.’’ 5 As a result, the Treasury,
in consultation with the Federal
banking agencies and law enforcement,
developed the modern SAR form and
reporting process, which standardized
the reporting forms and created a
centralized database that could be
accessed by multiple law enforcement
and regulatory agencies.
To implement this new reporting
system, the Financial Crimes
Enforcement Network of Treasury
(FinCEN) issued its implementing SAR
regulations in 1996 for financial
institutions subject to the requirements
of the BSA to, among other things,
specifically address the reporting of
money laundering transactions and
2 The OCC first codified this requirement in 1971
at 12 CFR 7.5225, which required national banks to
submit a report of ‘‘any state of facts growing out
of the affairs of the bank known or suspected to
involve criminal violation of any other section of
the United States Code’’ to the OCC, the Federal
Bureau of Investigations (FBI), the U.S. attorney for
the bank’s district, and the bank’s bonding
company. 36 FR 17000, 17012 (Aug. 26, 1971). In
1986 the OCC repealed 12 CFR 7.5225 and adopted
its criminal referral form regulation, 12 CFR 21.11,
which required national banks to report specified
suspicious transactions on a standardized criminal
referral form. 51 FR 25866 (July 17, 1986). As
explained below, the OCC revised 12 CFR 21.11 in
the 1990s to conform to the new SAR reporting
form and system.
3 54 FR 25839 (June 20, 1989).
4 Public Law 102–550, 106 Stat. 3672 (1992).
5 31 U.S.C. 5318(g)(1). The quoted text is from
section 1517 of the Annunzio-Wylie Anti-Money
Laundering Act, which was originally codified at 31
U.S.C. 5314(g). The text was moved as part of the
Violent Crime Control and Law Enforcement Act of
1994.
PO 00000
Frm 00008
Fmt 4700
Sfmt 4700
transactions designed to evade the
BSA’s reporting requirements.6 To
further implement this new reporting
process and reduce unnecessary
reporting burdens, the OCC and the
other Federal banking agencies
contemporaneously amended their
criminal referral form regulations to
incorporate the new SAR form and
reporting database, align their regulatory
reporting requirements with FinCEN’s
BSA reporting requirements, and further
refine the reporting processes.7
As a result of this redesign and
FinCEN’s implementing regulations,
national banks and Federal savings
associations now must file SARs under
both OCC and FinCEN regulations. The
OCC’s regulations are not identical but
are substantially similar to the BSA
reporting obligations required by
FinCEN. Both the OCC’s and FinCEN’s
SAR regulations require banks to file
SARs relating to money laundering,
transactions that are designed to evade
the reporting requirements of the BSA,
and transactions that have no business
or apparent lawful purpose or are not
the sort in which the particular
customer would normally be expected
to engage and the bank knows of no
reasonable explanation for the
transactions after examining the
available facts, including the
background and possible purpose of the
transactions.8 Furthermore, with respect
to the SAR confidentiality requirements
in the BSA, both the OCC’s and
FinCEN’s SAR regulations require banks
to maintain the confidentiality of a SAR
and any information that would reveal
the existence of the SAR unless an
exception applies.9
While the OCC and FinCEN
regulations contain substantively
similar requirements, including
requiring reporting in certain common
contexts and requiring institutions to
maintain the confidentiality of SARs,
the OCC and the other Federal banking
6 61 FR 4326 (Feb. 5, 1996). Before FinCEN’s SAR
regulation was adopted in 1996 and the
accompanying revisions to the OCC’s regulation,
the OCC’s criminal referral regulation did not have
a specific provision that required the reporting of
money laundering transactions. However, the
criminal referral regulation broadly encompassed
money laundering and structuring transactions as
explained in the SUPPLEMENTARY INFORMATION
section to the final rule enhancing the criminal
referral process. 54 FR 25839, 25840 (June 20,
1989). Congress authorized the Secretary of the
Treasury to administer the BSA, and the Secretary
has delegated to the Director of FinCEN the
authority to implement, administer, and enforce
compliance with the Act. Treasury Order 180–01
(Jan. 14, 2020).
7 61 FR 4332 (Feb. 5, 1996) (OCC).
8 See 12 CFR 21.11(c)(4) and 163.180(d)(3)(i)–(iv)
(OCC); 31 CFR 1020.320(a)(2).
9 12 CFR 21.11(k) and 163.180(d)(12) (OCC); 31
CFR 1020.320(e) (FinCEN).
E:\FR\FM\18MRR1.SGM
18MRR1
Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Rules and Regulations
jspears on DSK121TN23PROD with RULES1
agencies require reporting in broader
circumstances (e.g., insider abuse at any
dollar amount).10 These violations and
abuse situations can pose serious threats
to financial institutions’ continued
viability and, if unchecked, can
undermine the public confidence in the
Nation’s financial industry.
The OCC and FinCEN SAR
regulations provide: (i) That SARs are
not required for a robbery or burglary
committed or attempted that is reported
to appropriate law enforcement
authorities; (ii) that SARs are
confidential and shall not be disclosed
except as authorized; (iii) for SAR
recordkeeping requirements and
supporting documentation; (iv) that
supporting documentation shall be
deemed to have been filed with the
SAR; and (v) that supporting
documentation shall be made available
to appropriate law enforcement agencies
upon request.11 The regulations also
provide a limitation on liability for any
national bank, Federal savings
association, or other financial
institution and any director, officer,
employee, or agent of a national bank,
Federal savings association, or other
financial institution that makes a
voluntary disclosure of any possible
violation of law or regulation to a
government agency, or files a SAR
pursuant to the regulations or pursuant
to any other authority.12 The OCC’s
regulations contain a provision
requiring that national banks and
Federal savings associations promptly
notify their board of directors when a
SAR has been filed.13
Although neither the OCC’s SAR
regulations nor FinCEN’s SAR
regulation expressly address
exemptions, FinCEN has general
authority to grant exemptions from the
requirements of the BSA, which
includes granting exemptions under its
SAR reporting regulations.14 FinCEN’s
regulation provides that ‘‘[t]he Secretary
[of Treasury], in his sole discretion, may
by written order or authorization make
exceptions to or grant exemptions from
the requirements of [the BSA]. Such
exceptions or exemptions may be
conditional or unconditional, may apply
to particular persons or to classes of
persons, and may apply to transactions
10 See 12 CFR 21.11; 163.180 (OCC); 12 CFR
208.62 (Board); 12 CFR 390.353 (FDIC); 12 CFR
748.1 (NCUA).
11 12 CFR 21.11 and 163.180 (OCC); 31 CFR
1020.320 (FinCEN).
12 12 CFR 21.11(l) and 163.180(d)(12)(iv) (OCC);
31 CFR 1020.320(l) (FinCEN).
13 12 CFR 21.11(h) and 163.180(d)(9).
14 See 31 U.S.C. 5318(a)(7) with implementing
regulations at 31 CFR 1010.970.
VerDate Sep<11>2014
15:55 Mar 17, 2022
Jkt 256001
or classes of transactions.’’ 15 The
Secretary delegated this exemption
authority to FinCEN.16
The OCC’s authority to issue SAR
exemptions derives from its authority to
require national banks and Federal
savings associations to comply with
OCC-imposed SAR requirements. The
OCC has broad statutory authority to
issue regulations for national banks and
Federal savings associations. Among
other relevant sources of authority, 12
U.S.C. 161 provides that the
Comptroller may call for ‘‘special
reports.’’ Twelve U.S.C. 93a also
provides that the Comptroller ‘‘is
authorized to prescribe rules and
regulations to carry out the
responsibilities of the office.’’ 17 The
OCC has long viewed SAR requirements
and their predecessor reporting
requirements to be part of the OCC’s
mission of assuring safety and
soundness.18 The OCC’s legal authority
to require reports necessarily includes
the authority to modify those reporting
requirements, including the authority, if
necessary, to issue exemptions.
However, the OCC’s SAR regulations
currently contain no express exemption
provisions similar to FinCEN’s general
authority to grant exemptions from the
requirements of the BSA.
This disparity in exemption authority
makes it more difficult for the OCC to
grant relief if a national bank or Federal
savings association has a novel SARrelated proposal that does not squarely
fit within the regulatory requirements
but would be consistent with antimoney laundering regulatory and safety
and soundness standards. As financial
technology and innovation continue to
develop in the area of monitoring and
reporting financial crime and terrorist
financing, the OCC has identified a need
for regulatory flexibility to grant
exemptive relief when appropriate. In
2018 FinCEN and the Federal banking
agencies issued a statement encouraging
banks to take innovative approaches to
meet their BSA/anti-money laundering
(BSA/AML) compliance obligations.19
That statement explained that banks are
encouraged to consider, evaluate, and,
when appropriate, responsibly
implement innovative approaches for
BSA/AML compliance. Today,
innovative approaches and
technological developments in SAR
15 31
CFR 1010.970(a).
Order 180–01 (Jan. 14, 2020).
17 See also 12 U.S.C. 1463(a)(2).
18 12 U.S.C. 1.
19 Joint Statement on Innovative Efforts to Combat
Money Laundering and Terrorist Financing (Dec. 3,
2018), available at https://www.occ.gov/newsissuances/news-releases/2018/nr-occ-2018130a.pdf.
16 Treasury
PO 00000
Frm 00009
Fmt 4700
Sfmt 4700
15325
monitoring, investigation, and filings
may involve, among other things: (i)
Automated form population using
natural language processing, transaction
data, and customer due diligence
information; (ii) automated or limited
investigation processes depending on
the complexity and risk of a particular
transaction and appropriate safeguards;
and (iii) enhanced monitoring processes
using more and better data, optical
scanning, artificial intelligence, or
machine learning capabilities. The OCC
anticipates that requests for exemptive
relief pertaining to innovation or other
matters may involve, among other
things, expanded investigations and
SAR timing issues, SAR disclosures and
sharing, continued SAR filings for
ongoing activity, outsourcing of SAR
processes, the role of agents of national
banks and Federal savings associations,
the use of shared utilities and data, and
the use and sharing of de-identified data
(commonly referred to as anonymized
data).
The OCC expects that new
technologies will continue to prompt
additional innovative approaches
related to SAR filing and monitoring.
Some of these approaches may not
strictly comply with certain provisions
of the OCC’s SAR regulations. For
example, certain approaches involving
SAR-sharing across institutions may
violate prohibitions against disclosures
of SARs in 12 CFR 21.11(k) but would
enable an institution to file more
complete, useful SARs without
substantively undermining the purposes
of the SAR disclosure prohibition.
After the posting of the proposed rule
on the OCC website, but before its
publication in the Federal Register,
Congress passed the Anti-Money
Laundering Act of 2020 (AMLA of
2020).20 The AMLA of 2020 included
multiple provisions that will affect
suspicious activity reporting. Section
6202 of the AMLA of 2020 provides that
SARs ‘‘filed under this subsection shall
be guided by the compliance program of
a covered financial institution with
respect to the Bank Secrecy Act,
including the risk assessment processes
of the covered institution.’’ Section 6212
of the AMLA of 2020 directs Treasury
to establish a pilot program on SAR
sharing. Section 6204 of the AMLA Act
of 2020 requires the Treasury Secretary,
in consultation with various relevant
stakeholders, to conduct a formal review
of the financial institutions’ Currency
Transaction Report (CTR) and SAR
reporting requirements, including
processes for submission, regulations
implementing the BSA, and any
20 Public
E:\FR\FM\18MRR1.SGM
Law 116–283 (Jan. 1, 2021).
18MRR1
15326
Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Rules and Regulations
proposed changes to those reports to
reduce unnecessary burdens while
ensuring that the reports continue to
serve their intended purpose. Certain
provisions of the AMLA of 2020 may
require the OCC to apply SAR
requirements in ways that may
potentially conflict with the OCC’s
current SAR regulation. While FinCEN
has authority to address conflicts
between the AMLA of 2020 and
FinCEN’s regulations, either through
FinCEN’s preexisting exemption
authority or through authority granted
by the AMLA of 2020, the OCC’s SAR
regulations do not expressly permit
parallel exemptions. For example,
FinCEN’s pilot program on SAR sharing
might allow sharing of SARs in ways
that would arguably be inconsistent
with the OCC’s requirements on SAR
confidentiality.21 The OCC’s adoption of
exemption authority in its SAR
regulation will remove any legal
uncertainty related to national banks
and Federal savings associations
participation in such FinCEN programs.
III. The Proposal and Final Rule
The proposed rule would have
allowed the OCC to issue exemptions
from the requirements of its SAR
regulations. Specifically, the proposed
rule would have added a provision to 12
CFR 21.11 and 12 CFR 163.180 that
would provide that the OCC may
exempt a national bank or Federal
savings association from requirements
in those regulatory provisions. The OCC
is finalizing the proposed rule with
some modifications, which are
described below.22
IV. Comments
The OCC received seven comments on
its proposed rule.23 Some commenters
supported the proposed rule while
others opposed it. Some commenters
noted that they support a regulatory
framework that encourages innovation
and that the proposed rule would foster
responsible innovation and improve the
quality of reporting over time.
21 12
CFR 21.11(k); 12 CFR 163.180(d)(12).
final rule, like the OCC’s general SAR
requirements, applies to Federal branches and
agencies of foreign banks licensed or chartered by
the OCC. See 12 CFR 21.11(a).
23 The other agencies that simultaneously
published proposed rules received two additional
comment letters that were not received by the OCC;
however, the OCC has considered and addressed
those comments in this SUPPLEMENTARY INFORMATION
section. One comment suggested that the agencies
extend the comment period. The OCC concluded
that a longer comment period was not necessary,
and an extension of the comment period is not
legally required.
jspears on DSK121TN23PROD with RULES1
22 This
VerDate Sep<11>2014
15:55 Mar 17, 2022
Jkt 256001
A. Comments Opposing the Proposed
Rule
Commenters opposing the proposed
rule asserted that the proposed rule
provided no persuasive justification or
authority to issue an exemption. These
commenters also suggested that the
history of money laundering and SAR
deficiencies at major financial
institutions is inconsistent with the
OCC adopting exemptions to the SAR
requirements. Commenters opposing the
proposed rule also noted that criminals
may seek out financial institutions that
have been granted exemptions and that
the proposed rule may jeopardize U.S.
officials’ access to a key investigative
tool. Also, according to these
commenters, the rule should address a
significant Government Accountability
Office (GAO) report on SARs and
CTRs.24
The OCC has evaluated these
concerns and does not believe the final
rule will weaken reporting processes.
The amendments in the final rule will
conform the OCC’s exemption authority
to FinCEN’s exemption authority. The
OCC’s SAR regulations and FinCEN’s
SAR regulation feature significant
overlap. Many SARs are required to be
filed by both FinCEN’s SAR regulation
and the OCC’s SAR regulations. The
final rule will only allow the OCC to
issue exemptions from the requirements
of the OCC’s SAR regulations. Under the
final rule, national banks and Federal
savings associations will continue to be
required to comply with FinCEN’s SAR
regulation. For requests requiring
separate FinCEN and OCC approvals,
the OCC intends to coordinate with
FinCEN, and FinCEN would have to
issue a parallel exemption. Currently, if
FinCEN issues an exemption or uses
other authority to modify the
application of the requirements of its
SAR regulations, the OCC may not be
able to issue a parallel exemption.
The final rule will maintain national
banks’ and Federal savings associations’
core reporting responsibilities. The final
rule’s exemption authority, like
FinCEN’s exemption authority, is
drafted broadly and flexibly to handle
unexpected situations. However, the
OCC does not expect to use this
exemption authority to issue sweeping
exemptions that would undermine the
value provided by SARs. The final rule
includes factors the OCC will consider
before granting an exemption, which
24 GAO, Anti-Money Laundering: Opportunities
Exist to Increase Law Enforcement Use of Bank
Secrecy Act Reports, and Banks’ Costs to Comply
with the Act Varied (Sept. 22, 2020), available at
https://www.gao.gov/products/gao-20-574.
PO 00000
Frm 00010
Fmt 4700
Sfmt 4700
will help ensure that any exemptions
are appropriate.
While some commenters suggested
that the OCC lacks legal authority to
issue the final rule, as discussed above,
the OCC has broad statutory authority to
issue regulations for national banks and
Federal savings associations. For
example, 12 U.S.C. 161 provides that
the Comptroller may call for ‘‘special
reports’’ and 12 U.S.C. 93a provides that
the Comptroller ‘‘is authorized to
prescribe rules and regulations to carry
out the responsibilities of the office.’’ 25
The OCC has long viewed SAR
requirements and their predecessor
reporting requirements to be part of the
OCC’s mission of assuring safety and
soundness.26 The OCC’s legal authority
to require reports includes the authority
to modify reporting requirements and
issue exemptions, if appropriate.
One commenter suggested that the
OCC consider GAO’s 2020 report on
anti-money laundering compliance.27
The OCC considered this report, which
recommended that FinCEN better
support the use of SARs by law
enforcement. This final rule will not
affect the mechanisms that law
enforcement agencies use to access
SARs. Also, the OCC could approve
exemptions that would result in
additional SARs being filed, for
example, through the use of
automation.28 The OCC will consider
whether any exemption request is
consistent with the purposes of the
BSA, and these purposes include
requiring reports or records that are
‘‘highly useful’’ in ‘‘criminal, tax, or
regulatory investigations.’’ 29
Accordingly, the OCC will consider the
usefulness of potential SARs that would
be affected by an exemption request. In
determining whether an exemption
request is consistent with the purposes
of the Bank Secrecy Act, the OCC
intends to consult with FinCEN, as
appropriate.
The exemption authority in the final
rule is consistent with the OCC’s
support for the reallocation of bank
25 See
also 12 U.S.C. 1463(a)(2).
U.S.C. 1.
27 GAO, Anti-Money Laundering: Opportunities
Exist to Increase Law Enforcement Use of Bank
Secrecy Act Reports, and Banks’ Costs to Comply
with the Act Varied (Sept. 22, 2020), available at
https://www.gao.gov/products/gao-20-574.
28 See OCC Interpretive Letter 1166 (Sept. 27,
2019) (recognizing automated SAR generation as
consistent with SAR regulation).
29 31 U.S.C. 5311; 12 U.S.C. 1818(s)(1) (‘‘Each
appropriate Federal banking agency shall prescribe
regulations requiring insured depository
institutions to establish and maintain procedures
reasonably designed to assure and monitor the
compliance of such depository institutions with the
requirements of subchapter II of chapter 53 of Title
31.’’).
26 12
E:\FR\FM\18MRR1.SGM
18MRR1
jspears on DSK121TN23PROD with RULES1
Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Rules and Regulations
compliance resources to their most
effective uses. The AMLA of 2020
provided that compliance programs
should ensure that ‘‘more attention and
resources of financial institutions
should be directed toward higher-risk
customers and activities, consistent
with the risk profile of a financial
institution, rather than toward lower
risk customers and activities.’’ 30
Accordingly, it may be appropriate to
allow national banks and Federal
savings associations to tailor their
monitoring for suspicious activity so
banks might not file SARs in certain
specified situations involving lower risk
customers and activities. The agencies’
SAR regulations already contemplate
lower risk scenarios by having specific
dollar thresholds below which financial
institutions are not required to file
SARs. Similarly, it is unlikely that
criminals will target national banks and
Federal savings associations that have
received exemptions, as one commenter
suggested, because the OCC does not
expect to issue exemptions that would
relieve national banks and Federal
savings associations of their general
obligation to monitor for suspicious
activity or file appropriate SARs. The
OCC will weigh any potential for
criminals to target a national bank or
Federal savings association in
evaluating particular exemption
requests. Should information come to
light after the OCC approves an
exemption that criminals are potentially
targeting an institution because of its
exemption, the final rule provides the
OCC with authority, at its sole
discretion, to revoke the exemption.
Some commenters suggested that the
proposal was not supported by adequate
evidence and was therefore inconsistent
with the requirements of the
Administrative Procedure Act. One
commenter argued that the proposed
rule did not provide any data on costs
or cost savings that might accrue at a
financial institution if a SAR exemption
were granted or on what financial
institutions, if any, have requested SAR
exemptions in the past. The commenter
noted that the proposed rule estimates
that only five financial institutions per
year would request SAR exemptions but
provided no basis in research or data for
that prediction since it is possible that
all financial institutions would want an
exemption.
The OCC acknowledges that it is
difficult to predict exactly how many or
what type of exemptions might be
requested or ultimately granted. That is
why the exemption language in the final
30 Section 6101(b)(2)(B)(ii), codified at 31 U.S.C.
5318(h)(2)(B)(iv)(II).
VerDate Sep<11>2014
15:55 Mar 17, 2022
Jkt 256001
rule, like FinCEN’s exemption language,
is drafted broadly and flexibly. As
discussed above, this rule is intended to
make the limited changes necessary to
match the exemption authority already
possessed by FinCEN. The OCC is not
committing to offer or grant any
particular exemptions. The final rule
only creates the authority to issue
exemptions in the future. The proposed
rule included an estimate of five
exemption requests per year for
purposes of the burden estimates
required by the Paperwork Reduction
Act. However, this estimate of future
exemption requests is approximate and
does not represent an estimate of
exemption requests that the OCC
expects to actually grant. The OCC will
carefully examine any exemption
requests received and may issue few or
no exemptions if they do not satisfy the
OCC’s scrutiny.
B. Process for Issuing Exemptions
The final rule contains some
requirements that are not included in
FinCEN’s SAR regulation. Under the
final rule, for exemption requests
involving OCC-only SAR requirements,
a national bank or Federal savings
association will be required to seek an
exemption only from the OCC. For
exemption requests that will also
require an exemption from FinCEN’s
SAR regulation (for example, exemption
requests related to SAR filings required
by 12 CFR 21.11(c)(4), related to SAR
timing requirements in 12 CFR 21.11(d),
or related to SAR confidentiality in 12
CFR 21.11(k)), a national bank will need
to seek and obtain an exemption from
both the OCC and FinCEN to be afforded
exemptive relief.31
Commenters suggested that the OCC
work together with the other Federal
banking agencies and FinCEN to create
one standard and one system for any
institution to use when applying for an
exemption. Similarly, commenters
suggested that the OCC work together
with the other Federal banking agencies
and FinCEN to create a single-filing
process whereby an OCC-supervised
institution files solely with OCC and
any need for a FinCEN approval
involving the same application would
be obtained by OCC. Commenters
suggested that the agencies should
streamline the application process so
that it is only necessary to seek approval
from a bank’s prudential regulator.
Commenters recommended that the
31 The final rule, like the proposed rule, uses the
term ‘‘exemption’’ while FinCEN’s exemption
authority in 31 CFR 1010.970 uses both the terms
‘‘exemption’’ and ‘‘exception.’’ The OCC does not
believe there is a substantive distinction between
exemptions and exceptions in this context.
PO 00000
Frm 00011
Fmt 4700
Sfmt 4700
15327
agencies not require institutions to
duplicate work when multiple agencies’
approval is required.
One commenter suggested that the
agencies use an interagency rulemaking
to create a single, streamlined SAR
regulation that includes a process for
obtaining an exemption. According to
this commenter, when a bank requests
an exemption, it should only have to
submit a single application to its
primary prudential supervisor and not
multiple agencies. Other commenters
recommended that the agencies provide
templates of application forms or
similar tools to facilitate applications.
The OCC acknowledges the value of a
simple, straightforward application
process and the importance of
coordination among the agencies
administering SAR requirements. The
agencies are currently coordinating and
considering whether to provide specific
forms or issue guidance describing
application processes in more detail.
However, the final rule only makes the
limited textual changes to the OCC’s
SAR regulations necessary to provide
exemption authority paralleling
FinCEN’s exemption authority. These
limited changes do not preclude the
OCC or other agencies from taking
additional action later to streamline the
process for requests for SAR
exemptions.
Under the final rule, for exemption
requests involving OCC-only SAR
requirements, a national bank or Federal
savings association only needs to seek
an exemption from the OCC. For
exemption requests that also require an
exemption from FinCEN’s SAR
regulation, a national bank or Federal
savings association will need to seek an
exemption from both the OCC and
FinCEN.
One commenter suggested that the
agencies reconcile differences between
their SAR exemption proposals. The
proposed rule provided that a national
bank or Federal savings association
‘‘requesting an exemption that also
requires an exemption from the
requirements of FinCEN’s SAR
regulation must submit a request in
writing to both the OCC and FinCEN for
approval.’’ The rules proposed by the
Board, FDIC, and NCUA provided that
those agencies would have sought
FinCEN’s concurrence for any
exemption request that will also require
an exemption from FinCEN’s SAR
regulations. The OCC’s final rule, like
the proposed rule, does not specifically
provide for concurrence from FinCEN,
but this difference should not
functionally affect applications for
exemptions. Under the proposed rules
of any of the agencies, financial
E:\FR\FM\18MRR1.SGM
18MRR1
15328
Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Rules and Regulations
jspears on DSK121TN23PROD with RULES1
institutions would have have been
required to submit applications to both
FinCEN and their functional regulator
and receive approvals from both.
The OCC intends to coordinate with
the other agencies to develop
standardized procedures or forms for
handling certain exemption requests.
This is consistent with past practice
where the agencies have developed such
processes or forms after issuing
underlying regulations. For example,
certain OCC regulations require OCC
‘‘prior approval’’ before national banks
and Federal savings associations take
particular actions, and the OCC has
separately issued the licensing forms
and procedures necessary to obtain this
approval.32 The final rule only makes
the limited changes to the OCC’s SAR
regulations necessary to clarify its
authority to issue exemptions.
Under the final rule, a national bank
or Federal savings association
requesting an exemption from the
requirements of 12 CFR 21.11 or 12 CFR
163.180 must submit a request in
writing to the OCC.
C. Standards for Issuing an Exemption
The proposed rule listed separate
factors that the OCC would consider for
exemptions involving OCC-only
exemptions versus exemptions that
would also require exemptions from
FinCEN. The final rule, however,
provides a single set of factors that the
OCC will consider for all exemption
requests. Specifically, upon receipt of
any exemption request, the OCC will
consider whether the exemption is
consistent with the purposes of the BSA
and with safe and sound banking, and
may consider other appropriate factors.
Commenters raised a variety of
concerns about these factors. One
commenter stated that the proposed
exemption authority contains no
limitations or caveats and argued that
the absence of additional standards,
criteria, and procedures renders the
proposed rule unworkable and
susceptible to legal challenge. Similarly,
this commenter stated that the proposed
rule did not address how supervisory
concerns related to BSA/AML
deficiencies or a lower supervisory
rating due to repeated deficiencies
would affect the exemption process. The
commenter also observed that the
proposed rule provided no process for
an internal supervisory review or audit
32 See, e.g., 12 CFR 5.45 and 5.46 (requiring prior
approval for certain increases in capital). Separate
licensing forms provide a mechanism for this
approval, available at https://www.occ.gov/
publications-and-resources/publications/
comptrollers-licensing-manual/files/licensing-filingforms.html.
VerDate Sep<11>2014
15:55 Mar 17, 2022
Jkt 256001
of the SAR exemption decisions being
made by the OCC, which raises
concerns about consistent decisionmaking. Similarly, another commenter
stated that the proposed rule is overly
broad and could inadvertently permit
the wholesale exemption of entire
institutions or categories of institutions
from SAR requirements. According to
this commenter, the proposed rule does
not provide concrete standards or a
clear process, and the deficiencies could
be exploited, running counter to the
interests of financial transparency and
anti-money laundering objectives.
Another commenter suggested that
the agencies specify additional factors
they may consider when evaluating
exemption requests. Specifically, the
commenter suggested that the agencies
should consider whether the bank’s
exemption request would, if granted,
improve law enforcement and other end
users’ use of SAR data (e.g., the request
increases submission speed and
enhances data consistency) or allow the
requesting bank to reallocate resources
to higher value monitoring and
reporting processes. Another commenter
suggested that, in reviewing a request,
the agencies should consider whether
the exemption would, if granted,
enhance usefulness to law enforcement
and whether the exemption would, if
granted, enable the institution to
redeploy resources in a manner suitable
for the institution.
Another commenter expressed
concern that the proposal’s singular
focus on high-tech solutions will
disadvantage small and mid-sized
institutions that cannot afford, build, or
implement such novel, innovative
solutions to meet their SAR
requirements. According to this
commenter, smaller institutions still
struggle under manual SAR processes
and lower-tier technology. Another
commenter stated that it was unclear
how the proposed rule would cover
other institutions besides traditional
national banks and Federal savings
associations, including branches and
agencies of foreign banks, trust
companies, and service corporations.
Another commenter suggested that
the agencies provide clear guidance
governing how exemption requests will
be evaluated and how the various
considerations will be weighed, such as
whether more weight will be given to
broad machine learning applications
and algorithms or whether the agencies
will favor requests that focus on cost
and time savings, regardless of technical
sophistication. The commenter
expressed concerns that requests
submitted by small institutions may not
PO 00000
Frm 00012
Fmt 4700
Sfmt 4700
be able to match the technology used by
larger institutions.
The OCC acknowledges the concerns
raised by these commenters and expects
to consider various potential factors
when evaluating requests. However, it is
difficult to anticipate every possible
exemption request, and, as a
consequence, rigid or inflexible
procedures could limit the OCC’s future
ability to consider, and deny or issue,
exemptions. FinCEN’s regulation
authorizing exemptions does not
contain a prescribed list of factors that
will be considered before exemptions
are issued.33 Nor does FinCEN’s
regulation describe the process FinCEN
will use when evaluating an exemption
request. It would create inconsistency
and be potentially problematic for the
OCC’s regulation to include factors or
processes that are not included in
FinCEN’s regulation. That would make
the exemption provisions not truly
parallel and could pose difficulties for
financial institutions applying for
exemptions. For example, financial
institutions might have to submit
different applications to the OCC and
FinCEN to address different potential
factors and processes. This would create
an additional burden and would
undermine the value of creating parallel
exemption processes.
The final rule contains a set of factors
that the OCC will consider in reviewing
all requests in addition to considering
‘‘any other appropriate factor.’’
Specifically, the OCC will consider
whether the exemption is consistent
with the purposes of the BSA and with
safe and sound banking, and may
consider other appropriate factors.
Although FinCEN’s general exemption
provision, 31 CFR 1010.970(a), does not
have these factors, these are the same
factors that the OCC and FinCEN
consider as part of exemption
determinations involving customer
identification program requirements.34
The OCC has determined that it is
appropriate to commit to considering
them in the context of suspicious
activity reporting because they should
be relevant to any request for an
exemption. The OCC’s commitment to
considering these factors should not
promote inconsistency with FinCEN
since the OCC does not expect FinCEN
to issue exemptions that would be
inconsistent with these factors.
Requiring consideration of these factors
33 31
CFR 1010.970(a).
CFR 1020.220(b) (‘‘The Federal functional
regulator and the Secretary shall consider whether
the exemption is consistent with the purposes of
the Bank Secrecy Act and with safe and sound
banking, and may consider other appropriate
factors.’’).
34 31
E:\FR\FM\18MRR1.SGM
18MRR1
jspears on DSK121TN23PROD with RULES1
Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Rules and Regulations
will help ensure that any issued
exemptions are appropriate. Although
the OCC acknowledges the relevance of
other factors raised by the commenters
(such as the different technological
resources of large versus small financial
institutions), it is not appropriate or
necessary to embed such factors into the
regulation itself. Many of the additional
factors suggested by commenters are
already covered by the three factors in
the final rule.
The final rule provides that the OCC
will consider ‘‘any other appropriate
factors,’’ and the OCC expects to
consider other factors that may be
relevant to particular exemption
requests. The OCC’s SAR regulations
apply to all national banks and Federal
savings associations, and the new
exemption language will similarly cover
all national banks and Federal savings
associations. Although it is possible that
the terms of certain exemptions may be
tailored to particular types of national
banks or Federal savings associations
(for example, trust banks), the OCC will
not pre-judge how exemptions may be
applied to different types of national
banks and Federal savings association.
FinCEN’s exemption provision does not
distinguish between different types of
banking organizations, and it would be
inconsistent for the OCC’s exemption
provision to do this. The final rule, like
the OCC’s SAR regulations, applies to
Federal branches and agencies of foreign
banks licensed or chartered by the OCC.
In the proposed rule, the list of factors
that the OCC would consider for
exemption requests that would not
require an exemption from FinCEN did
not include considering whether the
exemption was consistent with the
purposes of the BSA. (The proposal
included this factor for requests that
would also require an exemption from
FinCEN.) The reporting requirements
now contained in the OCC’s SAR
regulations predate the BSA and
continue to be broader than FinCEN’s
SAR requirements in certain ways (i.e.,
requiring SARs in certain situations that
would not require SARs under FinCEN’s
SAR regulation). However, the OCC
agrees with the arguments made by
certain commentators and has
determined it is reasonable to consider
whether any exemption request is
consistent with the purposes of the
BSA, regardless of whether the
exemption request implicates FinCEN’s
SAR regulation. The proposed rule
explained how the BSA and successive
legislation has shaped reporting
requirements and developed the current
SAR regime. Also, it could be
inconsistent and confusing to consider
separate sets of factors for OCC-only
VerDate Sep<11>2014
15:55 Mar 17, 2022
Jkt 256001
SAR exemptions versus requests
requiring exemptions from both the
OCC and FinCEN. The proposed rule
specified that the OCC would consider
any ‘‘appropriate factors,’’ and the OCC
is now specifying that whether a request
is consistent with the purposes of the
BSA is such an appropriate factor for all
exemption requests. The proposed rule
explained the background and history of
the SAR requirements and detailed the
interaction between the OCC’s SAR
requirements and the BSA, which
establishes how the BSA is still relevant
to OCC-only SAR requirements.
Some commenters recommended that
the OCC consider additional factors as
part of exemption determinations.
However, the final rule already covers
many of the factors identified by
commenters. One commenter suggested
that the agencies should consider
whether an exemption request will
improve law enforcement and other
BSA end users’ use of SAR data.
However, the statutory purposes of the
BSA include requiring reports that are
‘‘highly useful’’ to various users of
SARs, including law enforcement.
Another commenter suggested that the
proposed rule did not explain how
supervisory concerns related to BSA/
AML deficiencies or a lower CAMELS
rating 35 due to repeated deficiencies
would affect the exemption process.
Those supervisory concerns would
implicate all of the factors listed in the
final rule. The OCC would not likely
approve an exemption request when a
national bank or Federal savings
association previously failed to prevent
money laundering or if granting the
exemption could contribute to unsafe or
unsound practices. ‘‘[O]ther appropriate
factors’’ could also include outstanding
supervisory concerns regarding BSA/
AML compliance.
The OCC and other agencies have
already provided guidance on the
principles relevant to responsible
innovation that are applicable to
innovative approaches for complying
with SAR requirements. Specifically,
the OCC has ‘‘define[d] Responsible
Innovation as the use of new or
improved financial products, services
and processes to meet the evolving
needs of consumers, businesses, and
communities in a manner that is
consistent with sound risk management
and is aligned with the bank’s overall
business strategy.’’ 36 Similarly, in 2018
FinCEN and the Federal banking
35 The Uniform Financial Institutions Rating
System, commonly referred to as the CAMELS
rating system.
36 https://www.occ.gov/topics/supervision-andexamination/responsible-innovation/indexresponsible-innovation.html.
PO 00000
Frm 00013
Fmt 4700
Sfmt 4700
15329
agencies issued a statement encouraging
banks to take innovative approaches to
meet their BSA/AML compliance
obligations.37 That statement explained
that banks are encouraged to consider,
evaluate, and, when appropriate,
responsibly implement innovative SAR
compliance approaches.
Pursuant to the final rule, a national
bank or Federal savings association
requesting an exemption from the
requirements of the OCC’s SAR
regulations will have to submit a request
in writing to the OCC (and potentially
also to FinCEN). Upon receiving a
written request from a national bank or
Federal savings association, the OCC
will consider the request and provide a
written response.
The OCC may notify the other Federal
banking agencies or FinCEN and
consider their comments before granting
any exemption. The final rule provides
that the OCC may grant an exemption
for a specified time period. One
commenter stated that the proposed
rule’s broad statement that it ‘‘may be
conditional or unconditional, may apply
to particular persons or to classes of
persons, and may apply to transactions
or classes of transactions’’ offered no
guidance on the menu of available relief
measures or which measures should be
used in which circumstances. This
language arises from the regulation that
includes FinCEN’s exemption
authority.38 The OCC removed this
language from the final rule to avoid any
confusion and because the OCC has not
used language like this in exemption
provisions in other regulations.39 The
removal of this language should not
have any substantive effect in the
context of the OCC’s SAR regulations or
limit the OCC’s ability to issue
exemptions.
D. Issuance of Exemptions, Publication,
and Modifications
The proposed rule provided that the
OCC would provide a written response
to a national bank or Federal savings
association that submits an exemption
request. Commenters suggested that the
OCC provide a clear timeline for
responding to a request for an
37 Joint Statement on Innovative Efforts to Combat
Money Laundering and Terrorist Financing (Dec. 3,
2018), available at https://www.occ.gov/newsissuances/news-releases/2018/nr-occ-2018130a.pdf.
38 31 CFR 1010.970.
39 See, e.g., 12 CFR 100.2 (‘‘The Comptroller of
the Currency may, for good cause and to the extent
permitted by statute, waive the applicability of any
provision of parts 1 through 197 of this chapter I,
as applicable, with respect to Federal savings
associations.’’). Similarly, other FinCEN exemption
provisions have not used language like this. See,
e.g., 31 CFR 1020.220(b).
E:\FR\FM\18MRR1.SGM
18MRR1
jspears on DSK121TN23PROD with RULES1
15330
Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Rules and Regulations
exemption, for example 30 days or 45
days. Several commenters suggested
that the OCC should publish approved
exemption decisions so that other
financial institutions are aware of the
OCC’s analysis regarding a particular
process or new technology (and would
not have to apply separately for
exemptions). One commenter
recommended that the agencies clarify
how they will handle requests may
contain trade secrets, proprietary
information, and other sensitive
business information.
The OCC recognizes the value of a
timely, transparent review and decision
process, and the OCC, in consultation
with the other agencies, may develop
standardized timelines for the
consideration of requests or the
publication of any exemptions.
However, at present, including such
procedures within the OCC’s regulation
would be inconsistent with FinCEN’s
exemption regulation. The OCC, in
consultation with the other agencies,
also is reviewing and potentially
revising SAR requirements as part of
changes made by the AMLA of 2020.
The OCC, in consultation with the other
agencies, may refine SAR requirements
in ways that align with the commenters’
concerns, but it is not possible to make
these commitments while other
potential SAR changes are still ongoing.
This final rule only makes the limited
and incremental changes necessary for
the OCC’s exemption authority to be
consistent with FinCEN’s rule. The OCC
routinely handles sensitive or
confidential information submitted by
national banks and Federal savings
associations, and the OCC expects to
follow appropriate protocols in
handling any such information
submitted along with exemption
requests.
The OCC acknowledges commenters’
concerns about making approved
exemptions public and transparent. The
final rule does not resolve whether or
not the OCC will publish approved
exemptions or redacted versions of
them. The OCC expects to determine
whether publication is appropriate in
the course of developing standardized
procedures for handling exemptions and
in coordination with FinCEN and the
other Federal banking agencies. The
OCC also notes that, to the extent that
an exemption request involves a
substantive legal interpretation or
action, such determinations are
regularly published by the OCC with
appropriate redactions.
Several comments addressed the
process for issuing an exemption,
including recommending governance
mechanisms to ensure the
VerDate Sep<11>2014
15:55 Mar 17, 2022
Jkt 256001
accountability of OCC officials making
exemption decisions. The OCC takes
such process concerns seriously but
does not believe it is appropriate to
address them in this regulation. The
OCC has separate governance
mechanisms to address the appropriate
delegation of authority within its
organizational structure. It would be
anomalous to embed additional internal
rules of agency procedure within the
OCC’s SAR regulations. Additionally,
such process requirements would be
inconsistent with FinCEN’s exemption
provision and would undermine the
value of consistent exemption
provisions.
One commenter recommended that
the agencies should make it clear that
banks are not required to run parallel
systems by running both their existing
process and the innovative process
simultaneously. Although the OCC
expects to resolve this issue in specific
exemption requests, the OCC notes that
the Interagency Statement on Innovative
Efforts to Combat Money Laundering
and Terrorist Financing states ‘‘that
pilot programs undertaken by banks, in
conjunction with existing BSA/AML
processes, are an important means of
testing and validating the effectiveness
of innovative approaches.’’ 40
Under the proposed rule, the OCC
also could have revoked previously
granted exemptions. The proposed rule
provided that the OCC would provide
written notice to a national bank or
Federal savings association of the OCC’s
intention to revoke an exemption. The
notice would have included the basis
for the revocation and would provide an
opportunity for the national bank or
Federal savings association to submit a
response to the OCC. One commenter
stated that the proposed rule offers no
standards or criteria for determining
when to extend or revoke a SAR
exemption. Another commenter
suggested that the OCC create an appeal
process so an applicant may make
changes and re-submit without having
to completely re-apply for an
exemption. One commenter
recommended giving financial
institutions a timeline for revocation so
they have the opportunity to prepare
and re-direct resources. Another
commenter recommended that, before
an exemption is revoked, the agencies
should provide reasonable notice to
allow the institution ample time to
reinstitute and test their pre-existing
SAR monitoring processes. Another
40 See ‘‘Joint Interagency Statement on Innovative
Efforts to Combat Money Laundering and Terrorist
Financing 2,’’ (Dec. 3, 2018), available at https://
www.occ.gov/news-issuances/news-releases/2018/
nr-occ-2018-130a.pdf.
PO 00000
Frm 00014
Fmt 4700
Sfmt 4700
commenter recommended that the rule’s
procedures should include an appeal
mechanism or second review so that a
denied application can be revised or
amended to address any objections
raised by an agency. Another
commenter suggested that the agencies
should provide a sufficient timeline
before revoking an exemption.
The OCC is finalizing the revocation
provisions as proposed. FinCEN’s
exemption provision provides that
exemptions ‘‘shall be revocable in the
sole discretion of the Secretary.’’ 41 The
OCC similarly believes it is appropriate
to communicate in the final rule that
exemptions are not permanent and may
be revoked. Although the OCC
recognizes the potential value of the
additional procedures or checks
suggested by the commenters (for
example, an appeal mechanism), it is
unnecessary to include such features
and internal processes in the regulation.
The final rule provides for an
opportunity for notice and response
before revocation, which would
promote fairness and due process. In
addition, additional procedures or
checks would be inconsistent with
FinCEN’s regulation. To support a
coordinated regulatory response, the
OCC intends to cooperate with FinCEN
when considering whether to revoke an
exemption, to the extent possible.
Although the OCC plans to carefully
evaluate exemption requests so as to
avoid where possible the need for
revocation, it would be inappropriate to
add other mandatory pre-revocation
procedures because the procedures
could interfere with the potential need
for expedited revocation.
E. Other Comments
Several commenters raised issues not
directly relevant to this rulemaking. One
commenter supported a broader effort to
review and harmonize supervisory
expectations, perhaps even through a
single rulemaking. Another commenter
supported other efforts to improve SAR
regulations, including a streamlined
form, narrative improvements, and
reporting thresholds. Another
commenter recommended that the
agencies recognize the new priorities in
the AMLA of 2020, including the goal
to update and modernize the overall
AML system. One commenter suggested
that the agencies change the focus in
their proposed rules to recognize that
the goal is providing useful information
for law enforcement through the riskbased approach while also protecting
the financial institution and confidence
in the banking system.
41 31
E:\FR\FM\18MRR1.SGM
CFR 1010.970(a).
18MRR1
Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Rules and Regulations
The OCC is undertaking reviews of,
and potentially changes to, reporting
requirements as part of implementing
the AMLA of 2020. The OCC will
evaluate these comments in the context
of this broader review of SAR
requirements and AML requirements
generally. This final rule only makes the
limited, incremental changes necessary
to conform the OCC’s SAR exemption
authority to FinCEN’s.
V. Administrative Law Matters
A. Congressional Review Act
For purposes of the Congressional
Review Act, the Office of Management
and Budget (OMB) makes a
determination as to whether a final rule
constitutes a ‘‘major’’ rule.42 If OMB
deems a final rule is ‘‘major,’’ the
Congressional Review Act generally
provides that the rule may not take
effect until at least 60 days following its
publication.43 The Congressional
Review Act defines a ‘‘major rule’’ as
any rule that the Administrator of the
Office of Information and Regulatory
Affairs of the OMB finds has resulted in
or is likely to result in (1) an annual
effect on the economy of $100 million
or more; (2) a major increase in costs or
prices for consumers, individual
industries, Federal, state, or local
government agencies or geographic
regions, or (3) a significant adverse
effects on competition, employment,
investment, productivity, innovation, or
on the ability of U.S.-based enterprises
to compete with foreign-based
enterprises in domestic and export
markets.44 As required by the
Congressional Review Act, the OCC will
submit the final rule and other
appropriate reports to Congress and the
GAO for review.
jspears on DSK121TN23PROD with RULES1
B. Solicitation of Comments and Use of
Plain Language
Section 722 of the Gramm-LeachBliley Act 45 requires the Federal
banking agencies to use plain language
in all proposed and final rules
published after January 1, 2000. The
agencies sought to present the final rule
in a simple, straightforward manner and
did not receive any comments on the
use of plain language in the proposed
rule.
C. Paperwork Reduction Act
Certain provisions of the final rule
contain are a ‘‘collection of
information’’ within the meaning of the
42 5
U.S.C. 801 et seq.
U.S.C. 801(a)(3).
44 5 U.S.C. 804(2).
45 Public Law 106–102, sec. 722, 113 Stat. 1338,
1471 (1999), codified at 12 U.S.C. 4809.
43 5
VerDate Sep<11>2014
15:55 Mar 17, 2022
Jkt 256001
Paperwork Reduction Act (PRA) of 1995
(44 U.S.C. 3501–3521). In accordance
with the act’s requirements, agencies
may not conduct or sponsor, and a
respondent is not required to respond
to, an information collection unless it
displays a currently valid OMB control
number. The OCC reviewed the rule and
determined that it revises information
collection requirements previously
approved by the OMB under OMB
Control No. 1557–0180. The OCC
submitted the revised information
collection to the OMB for review under
section 3507(d) of the PRA (44 U.S.C.
3507(d)) and § 1320.11 of the OMB’s
implementing regulations (5 CFR 1320).
Current Actions. The rule revises 12
CFR 21.11 and 12 CFR 163.180 to allow
national banks and Federal savings
associations to submit written requests
for exemptions from the requirements of
the OCC’s SAR regulations. The burden
estimates below are based on the
estimated number of national banks and
Federal savings associations that might
request exemptions each year and the
estimated number of hours required to
submit a request.
Title of Information Collection:
Minimum Security Devices and
Procedures, Reports of Suspicious
Activities, and Bank Secrecy Act
Compliance Program.
Frequency: Event generated.
Affected public: Businesses or other
for-profit.
Estimated number of respondents: 5.
Total estimated annual burden: 250
hours.
D. Regulatory Flexibility Act
In general, the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601 et seq.) requires
an agency, in connection with a final
rule, to prepare a final regulatory
flexibility analysis describing the rule’s
impact on small entities (defined by the
Small Business Administration for
purposes of the RFA to include
commercial banks and savings
institutions with total assets of $600
million or less and trust companies with
total assets of $41.5 million or less).
However, under section 605(b) of the
RFA, this analysis is not required if an
agency certifies that the rule will not
have a significant economic impact on
a substantial number of small entities
and publishes its certification and a
short explanatory statement in the
Federal Register along with its rule.
The OCC currently supervises
approximately 1,117 institutions
(national banks, trust companies,
Federal savings associations, and
branches or agencies of foreign banks,
collectively banks), of which 669 are
PO 00000
Frm 00015
Fmt 4700
Sfmt 4700
15331
small entities.46 Because the final rule
imposes no new mandates, it will have
only de minimis costs to OCCsupervised small entities. Therefore, the
OCC certifies that the final rule will not
have a significant economic impact on
a substantial number of small entities.
Accordingly, a final regulatory
flexibility analysis is not required.
E. Riegle Community Development and
Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the
Riegle Community Development and
Regulatory Improvement Act (RCDRIA)
of 1994 (12 U.S.C. 4802(a)) in
determining the effective date and
administrative compliance requirements
for new regulations that impose
additional reporting, disclosure, or other
requirements on insured depository
institutions, the OCC must consider,
consistent with principles of safety and
soundness and the public interest (1)
any administrative burdens that the
final rule would place on depository
institutions, including small depository
institutions and customers of depository
institutions, and (2) the benefits of the
final rule. In addition, section 302(b) of
RCDRIA requires new regulations and
amendments to regulations that impose
additional reporting, disclosures, or
other new requirements on insured
depository institutions generally to take
effect on the first day of a calendar
quarter that begins on or after the date
on which the regulations are published
in final form.47 The OCC considered the
changes made by this final rule and
believes that the effective date of May 1,
2022, will provide OCC-regulated
institutions with adequate time to
comply with the rule. The final rule will
not impose any new administrative
compliance requirements, and the OCC
believes that the burdens of preparing a
request for exemption are justified by
the agency’s need to evaluate
information and factors relevant to the
exemption request and to promote
consistency.
F. OCC Unfunded Mandates Reform Act
of 1995
The OCC analyzed the final rule
under the factors in the Unfunded
Mandates Reform Act (UMRA) of 1995
46 Consistent with the General Principles of
Affiliation 13 CFR 121.103(a), the OCC counts the
assets of affiliated financial institutions when
determining whether it should classify an
institution as a small entity. The OCC used
December 31, 2020, to determine size because a
‘‘financial institution’s assets are determined by
averaging the assets reported on its four quarterly
financial statements for the preceding year.’’ See
footnote 8 of the U.S. Small Business
Administration’s Table of Size Standards.
47 12 U.S.C. 4802(b).
E:\FR\FM\18MRR1.SGM
18MRR1
15332
Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Rules and Regulations
2 U.S.C. 1501 et seq. Under this
analysis, the OCC considered whether
the final rule includes a Federal
mandate that may result in the
expenditure by state, local, and tribal
governments, in the aggregate, or by the
private sector, of $100 million or more
in any one year ($157 million as
adjusted annually for inflation). The
UMRA does not apply to regulations
that incorporate requirements
specifically set forth in law.
The final rule will not impose new
mandates on any national banks or
Federal savings associations. Therefore,
the OCC concludes that the final rule
will not result in an expenditure of $157
million or more annually by state, local,
and tribal governments, or by the
private sector. As a result, the OCC finds
that the final rule does not trigger the
UMRA cost threshold. Accordingly, the
OCC has not prepared the written
statement described in section 202 of
the UMRA.
List of Subjects
12 CFR Part 21
Crime, Currency, National banks,
Reporting and recordkeeping
requirements, Security measures.
12 CFR Part 163
Accounting, Administrative practice
and procedure, Advertising, Crime,
Currency, Investments, Mortgages,
Reporting and recordkeeping
requirements, Savings associations.
Authority and Issuance
For the reasons stated in the
SUPPLEMENTARY INFORMATION, chapter I
of title 12 of the Code of Federal
Regulations is amended as follows:
PART 21—MINIMUM SECURITY
DEVICES AND PROCEDURES,
REPORTS OF SUSPICIOUS
ACTIVITIES, AND BANK SECRECY
ACT COMPLIANCE PROGRAM
1. Revise the authority citation for part
21 to read as follows:
■
Authority: 12 U.S.C. 1, 93a, 161, 1462a,
1463, 1464, 1818, 1881–1884, and 3401–
3422; 31 U.S.C. 5318.
3. Revise the authority citation for part
163 to read as follows:
Suspicious Activity Report.
jspears on DSK121TN23PROD with RULES1
*
*
*
*
*
(m) Exemptions. (1) The Office of the
Comptroller of the Currency (OCC) may
grant a national bank an exemption from
the requirements of this section. A
national bank requesting an exemption
must submit a request in writing to the
OCC. In reviewing such requests, the
OCC will consider whether the
VerDate Sep<11>2014
15:55 Mar 17, 2022
Jkt 256001
PART 163—SAVINGS
ASSOCIATIONS—OPERATIONS
■
2. In § 21.11, add paragraph (m) to
read as follows:
■
§ 21.11
exemption is consistent with the
purposes of the Bank Secrecy Act (if
applicable) and safe and sound banking,
and may consider other appropriate
factors. Any exemption will apply only
as expressly stated in the exemption. (A
national bank requesting an exemption
that also requires relief from the
requirements of applicable regulations
issued by the Department of the
Treasury at 31 CFR chapter X must
submit a request in writing to both the
OCC and FinCEN for approval.)
(2) The OCC will respond in writing
to a national bank that submits a request
pursuant to paragraph (m)(1) of this
section after considering whether the
exemption is consistent with the factors
in paragraph (m)(1) of this section. Any
exemption granted by the OCC under
paragraph (m)(1) of this section will
continue for the time specified by the
OCC.
(3) The OCC may extend the period of
time or may revoke an exemption
granted under paragraph (m)(1) of this
section. Exemptions or extensions may
be revoked in the sole discretion of the
OCC. Before revoking an exemption, the
OCC will provide written notice to the
national bank of the OCC’s intention to
revoke an exemption. Such notice will
include the basis for the revocation and
will provide an opportunity for the
national bank to submit a response to
the OCC. The OCC will consider any
response before deciding whether or not
to revoke an exemption and provide
written notice to the national bank of
the OCC’s final decision to revoke an
exemption.
(4) With respect to requests for
exemptions that will also require relief
from the requirements of applicable
regulations issued by the Department of
the Treasury at 31 CFR chapter X, upon
receiving approval from both the OCC
and FinCEN, the requestor will be
relieved of its obligations under this
section to the extent stated in such
approvals.
Authority: 12 U.S.C. 1, 93a, 1462a, 1463,
1464, 1467a, 1817, 1820, 1828, 1831o, 3806,
5101 et seq., 5412(b)(2)(B); 31 U.S.C. 5318; 42
U.S.C. 4106.
4. In § 163.180, add paragraph (f) to
read as follows:
■
§ 163.180 Suspicious Activity Reports and
other reports and statements.
*
*
*
*
*
(f) Exemptions. (1) The OCC may
grant a Federal savings association or
PO 00000
Frm 00016
Fmt 4700
Sfmt 4700
service corporation an exemption from
the requirements of this section. A
Federal savings association or service
corporation requesting an exemption
must submit a request in writing to the
OCC. In reviewing such requests, the
OCC will consider whether the
exemption is consistent with the
purposes of the Bank Secrecy Act (if
applicable) and safe and sound banking,
and may consider other appropriate
factors. Any exemption will apply only
as expressly stated in the exemption. (A
Federal savings association or service
corporation requesting an exemption
that also requires relief from the
requirements of applicable regulations
issued by the Department of the
Treasury at 31 CFR chapter X must
submit a request in writing to both the
OCC and FinCEN for approval.)
(2) The OCC will respond in writing
to the Federal savings association or
service corporation that submits a
request pursuant to paragraph (f)(1) of
this section after considering whether
the exemption is consistent with the
factors in paragraph (f)(1) of this section.
Any exemption granted by the OCC
under paragraph (f)(1) of this section
will continue for the time specified by
the OCC.
(3) The OCC may extend the period of
time or may revoke an exemption
granted under paragraph (f)(1) of this
section. Exemptions or extensions may
be revoked in the sole discretion of the
OCC. Before revoking an exemption, the
OCC will provide written notice to the
Federal savings association or service
corporation of the OCC’s intention to
revoke an exemption. Such notice will
include the basis for the revocation and
will provide an opportunity for the
Federal savings association or service
corporation to submit a response to the
OCC. The OCC will consider any
response before deciding whether or not
to revoke an exemption and provide
written notice to the Federal savings
association or service corporation of the
OCC’s final decision to revoke an
exemption.
(4) With respect to requests for
exemptions that will also require relief
from the requirements of applicable
regulations issued by the Department of
the Treasury at 31 CFR chapter X, upon
receiving approval from both the OCC
and FinCEN, the requestor will be
relieved of its obligations under this
section to the extent stated in such
approvals.
Michael J. Hsu,
Acting Comptroller of the Currency.
[FR Doc. 2022–05521 Filed 3–17–22; 8:45 am]
BILLING CODE 4810–33–P
E:\FR\FM\18MRR1.SGM
18MRR1
]]>Agencies
[Federal Register Volume 87, Number 53 (Friday, March 18, 2022)]
[Rules and Regulations]
[Pages 15323-15332]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-05521]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Parts 21 and 163
[Docket No. OCC-2020-0037]
RIN 1557-AE77
Exemptions to Suspicious Activity Report Requirements
AGENCY: Office of the Comptroller of the Currency (OCC), Treasury.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule modifies the requirements for national banks
and
[[Page 15324]]
Federal savings associations, including Federal branches and agencies
of foreign banks licensed or chartered by the OCC, to file suspicious
activity reports (SARs). It amends the OCC's SAR regulations to allow
the OCC to issue exemptions from the requirements of those regulations
upon request from a financial institution subject to those regulations.
The rule harmonizes the OCC's legal authority with the preexisting
exemption authority of the Financial Crimes Enforcement Network
(FinCEN) of the U.S. Department of the Treasury. This rule will make it
possible for the OCC to facilitate changes required by the Anti-Money
Laundering Act of 2020. The final rule will also make it possible for
the OCC to grant relief to national banks or Federal savings
associations that develop innovative solutions intended to meet Bank
Secrecy Act requirements more efficiently and effectively.
DATES: This rule is effective on May 1, 2022.
FOR FURTHER INFORMATION CONTACT: Jina Cheon, Counsel; Henry Barkhausen,
Counsel; or Scott Burnett, Counsel, Chief Counsel's Office (202) 649-
5490; Office of the Comptroller of the Currency, 400 7th Street SW,
Washington, DC 20219.
SUPPLEMENTARY INFORMATION:
I. Introduction
OCC regulations require national banks and Federal savings
associations to file suspicious activity reports (SARs) under certain
conditions. These regulations also provide for (i) board of director
notification; (ii) filing exceptions; (iii) SAR confidentiality; (iv)
recordkeeping requirements; (v) supporting documentation requirements;
and (vi) limitations on liability. Requirements related to SARs are
codified at 12 CFR 21.11 for national banks and 12 CFR 163.180 for
Federal savings associations. On January 22, 2021, the OCC, the Board
of Governors of the Federal Reserve System (Board), the Federal Deposit
Insurance Corporation (FDIC), and the National Credit Union
Administration (NCUA) (collectively, the agencies or Federal banking
agencies) published substantially similar proposed rules that would
amend their respective SAR regulations to allow the agencies to issue
exemptions from the requirements of those regulations.\1\ The OCC is
adopting its proposed rule in final form.
---------------------------------------------------------------------------
\1\ 86 FR 6572 (Jan. 22, 2021) (OCC); 86 FR 6576 (Jan. 22, 2021)
(Board); 86 FR 6580 (Jan. 22, 2021) (FDIC); 86 FR 6586 (Jan. 22,
2021) (NCUA).
---------------------------------------------------------------------------
II. Background
The OCC has long required its regulated institutions to report
potential violations of law arising from transactions that flow through
those institutions.\2\ The OCC required such reporting because fraud,
abusive insider transactions, check-kiting schemes, money laundering,
and other financial crimes can pose serious threats to a financial
institution's continued viability and, if unchecked, can undermine the
public confidence in the Nation's financial system generally.\3\
---------------------------------------------------------------------------
\2\ The OCC first codified this requirement in 1971 at 12 CFR
7.5225, which required national banks to submit a report of ``any
state of facts growing out of the affairs of the bank known or
suspected to involve criminal violation of any other section of the
United States Code'' to the OCC, the Federal Bureau of
Investigations (FBI), the U.S. attorney for the bank's district, and
the bank's bonding company. 36 FR 17000, 17012 (Aug. 26, 1971). In
1986 the OCC repealed 12 CFR 7.5225 and adopted its criminal
referral form regulation, 12 CFR 21.11, which required national
banks to report specified suspicious transactions on a standardized
criminal referral form. 51 FR 25866 (July 17, 1986). As explained
below, the OCC revised 12 CFR 21.11 in the 1990s to conform to the
new SAR reporting form and system.
\3\ 54 FR 25839 (June 20, 1989).
---------------------------------------------------------------------------
In 1992 Congress passed the Annunzio-Wylie Anti-Money Laundering
Act, which redesigned the criminal referral process applicable to
financial institutions including OCC-supervised entities and made the
reporting of certain suspicious transactions a requirement of the Bank
Secrecy Act (BSA).\4\ The Act permitted the U.S. Department of the
Treasury (Treasury) to require financial institutions, including
national banks and Federal savings associations, to ``report any
suspicious transaction relevant to a possible violation of law or
regulation.'' \5\ As a result, the Treasury, in consultation with the
Federal banking agencies and law enforcement, developed the modern SAR
form and reporting process, which standardized the reporting forms and
created a centralized database that could be accessed by multiple law
enforcement and regulatory agencies.
---------------------------------------------------------------------------
\4\ Public Law 102-550, 106 Stat. 3672 (1992).
\5\ 31 U.S.C. 5318(g)(1). The quoted text is from section 1517
of the Annunzio-Wylie Anti-Money Laundering Act, which was
originally codified at 31 U.S.C. 5314(g). The text was moved as part
of the Violent Crime Control and Law Enforcement Act of 1994.
---------------------------------------------------------------------------
To implement this new reporting system, the Financial Crimes
Enforcement Network of Treasury (FinCEN) issued its implementing SAR
regulations in 1996 for financial institutions subject to the
requirements of the BSA to, among other things, specifically address
the reporting of money laundering transactions and transactions
designed to evade the BSA's reporting requirements.\6\ To further
implement this new reporting process and reduce unnecessary reporting
burdens, the OCC and the other Federal banking agencies
contemporaneously amended their criminal referral form regulations to
incorporate the new SAR form and reporting database, align their
regulatory reporting requirements with FinCEN's BSA reporting
requirements, and further refine the reporting processes.\7\
---------------------------------------------------------------------------
\6\ 61 FR 4326 (Feb. 5, 1996). Before FinCEN's SAR regulation
was adopted in 1996 and the accompanying revisions to the OCC's
regulation, the OCC's criminal referral regulation did not have a
specific provision that required the reporting of money laundering
transactions. However, the criminal referral regulation broadly
encompassed money laundering and structuring transactions as
explained in the SUPPLEMENTARY INFORMATION section to the final rule
enhancing the criminal referral process. 54 FR 25839, 25840 (June
20, 1989). Congress authorized the Secretary of the Treasury to
administer the BSA, and the Secretary has delegated to the Director
of FinCEN the authority to implement, administer, and enforce
compliance with the Act. Treasury Order 180-01 (Jan. 14, 2020).
\7\ 61 FR 4332 (Feb. 5, 1996) (OCC).
---------------------------------------------------------------------------
As a result of this redesign and FinCEN's implementing regulations,
national banks and Federal savings associations now must file SARs
under both OCC and FinCEN regulations. The OCC's regulations are not
identical but are substantially similar to the BSA reporting
obligations required by FinCEN. Both the OCC's and FinCEN's SAR
regulations require banks to file SARs relating to money laundering,
transactions that are designed to evade the reporting requirements of
the BSA, and transactions that have no business or apparent lawful
purpose or are not the sort in which the particular customer would
normally be expected to engage and the bank knows of no reasonable
explanation for the transactions after examining the available facts,
including the background and possible purpose of the transactions.\8\
Furthermore, with respect to the SAR confidentiality requirements in
the BSA, both the OCC's and FinCEN's SAR regulations require banks to
maintain the confidentiality of a SAR and any information that would
reveal the existence of the SAR unless an exception applies.\9\
---------------------------------------------------------------------------
\8\ See 12 CFR 21.11(c)(4) and 163.180(d)(3)(i)-(iv) (OCC); 31
CFR 1020.320(a)(2).
\9\ 12 CFR 21.11(k) and 163.180(d)(12) (OCC); 31 CFR 1020.320(e)
(FinCEN).
---------------------------------------------------------------------------
While the OCC and FinCEN regulations contain substantively similar
requirements, including requiring reporting in certain common contexts
and requiring institutions to maintain the confidentiality of SARs, the
OCC and the other Federal banking
[[Page 15325]]
agencies require reporting in broader circumstances (e.g., insider
abuse at any dollar amount).\10\ These violations and abuse situations
can pose serious threats to financial institutions' continued viability
and, if unchecked, can undermine the public confidence in the Nation's
financial industry.
---------------------------------------------------------------------------
\10\ See 12 CFR 21.11; 163.180 (OCC); 12 CFR 208.62 (Board); 12
CFR 390.353 (FDIC); 12 CFR 748.1 (NCUA).
---------------------------------------------------------------------------
The OCC and FinCEN SAR regulations provide: (i) That SARs are not
required for a robbery or burglary committed or attempted that is
reported to appropriate law enforcement authorities; (ii) that SARs are
confidential and shall not be disclosed except as authorized; (iii) for
SAR recordkeeping requirements and supporting documentation; (iv) that
supporting documentation shall be deemed to have been filed with the
SAR; and (v) that supporting documentation shall be made available to
appropriate law enforcement agencies upon request.\11\ The regulations
also provide a limitation on liability for any national bank, Federal
savings association, or other financial institution and any director,
officer, employee, or agent of a national bank, Federal savings
association, or other financial institution that makes a voluntary
disclosure of any possible violation of law or regulation to a
government agency, or files a SAR pursuant to the regulations or
pursuant to any other authority.\12\ The OCC's regulations contain a
provision requiring that national banks and Federal savings
associations promptly notify their board of directors when a SAR has
been filed.\13\
---------------------------------------------------------------------------
\11\ 12 CFR 21.11 and 163.180 (OCC); 31 CFR 1020.320 (FinCEN).
\12\ 12 CFR 21.11(l) and 163.180(d)(12)(iv) (OCC); 31 CFR
1020.320(l) (FinCEN).
\13\ 12 CFR 21.11(h) and 163.180(d)(9).
---------------------------------------------------------------------------
Although neither the OCC's SAR regulations nor FinCEN's SAR
regulation expressly address exemptions, FinCEN has general authority
to grant exemptions from the requirements of the BSA, which includes
granting exemptions under its SAR reporting regulations.\14\ FinCEN's
regulation provides that ``[t]he Secretary [of Treasury], in his sole
discretion, may by written order or authorization make exceptions to or
grant exemptions from the requirements of [the BSA]. Such exceptions or
exemptions may be conditional or unconditional, may apply to particular
persons or to classes of persons, and may apply to transactions or
classes of transactions.'' \15\ The Secretary delegated this exemption
authority to FinCEN.\16\
---------------------------------------------------------------------------
\14\ See 31 U.S.C. 5318(a)(7) with implementing regulations at
31 CFR 1010.970.
\15\ 31 CFR 1010.970(a).
\16\ Treasury Order 180-01 (Jan. 14, 2020).
---------------------------------------------------------------------------
The OCC's authority to issue SAR exemptions derives from its
authority to require national banks and Federal savings associations to
comply with OCC-imposed SAR requirements. The OCC has broad statutory
authority to issue regulations for national banks and Federal savings
associations. Among other relevant sources of authority, 12 U.S.C. 161
provides that the Comptroller may call for ``special reports.'' Twelve
U.S.C. 93a also provides that the Comptroller ``is authorized to
prescribe rules and regulations to carry out the responsibilities of
the office.'' \17\ The OCC has long viewed SAR requirements and their
predecessor reporting requirements to be part of the OCC's mission of
assuring safety and soundness.\18\ The OCC's legal authority to require
reports necessarily includes the authority to modify those reporting
requirements, including the authority, if necessary, to issue
exemptions. However, the OCC's SAR regulations currently contain no
express exemption provisions similar to FinCEN's general authority to
grant exemptions from the requirements of the BSA.
---------------------------------------------------------------------------
\17\ See also 12 U.S.C. 1463(a)(2).
\18\ 12 U.S.C. 1.
---------------------------------------------------------------------------
This disparity in exemption authority makes it more difficult for
the OCC to grant relief if a national bank or Federal savings
association has a novel SAR-related proposal that does not squarely fit
within the regulatory requirements but would be consistent with anti-
money laundering regulatory and safety and soundness standards. As
financial technology and innovation continue to develop in the area of
monitoring and reporting financial crime and terrorist financing, the
OCC has identified a need for regulatory flexibility to grant exemptive
relief when appropriate. In 2018 FinCEN and the Federal banking
agencies issued a statement encouraging banks to take innovative
approaches to meet their BSA/anti-money laundering (BSA/AML) compliance
obligations.\19\ That statement explained that banks are encouraged to
consider, evaluate, and, when appropriate, responsibly implement
innovative approaches for BSA/AML compliance. Today, innovative
approaches and technological developments in SAR monitoring,
investigation, and filings may involve, among other things: (i)
Automated form population using natural language processing,
transaction data, and customer due diligence information; (ii)
automated or limited investigation processes depending on the
complexity and risk of a particular transaction and appropriate
safeguards; and (iii) enhanced monitoring processes using more and
better data, optical scanning, artificial intelligence, or machine
learning capabilities. The OCC anticipates that requests for exemptive
relief pertaining to innovation or other matters may involve, among
other things, expanded investigations and SAR timing issues, SAR
disclosures and sharing, continued SAR filings for ongoing activity,
outsourcing of SAR processes, the role of agents of national banks and
Federal savings associations, the use of shared utilities and data, and
the use and sharing of de-identified data (commonly referred to as
anonymized data).
---------------------------------------------------------------------------
\19\ Joint Statement on Innovative Efforts to Combat Money
Laundering and Terrorist Financing (Dec. 3, 2018), available at
https://www.occ.gov/news-issuances/news-releases/2018/nr-occ-2018-130a.pdf.
---------------------------------------------------------------------------
The OCC expects that new technologies will continue to prompt
additional innovative approaches related to SAR filing and monitoring.
Some of these approaches may not strictly comply with certain
provisions of the OCC's SAR regulations. For example, certain
approaches involving SAR-sharing across institutions may violate
prohibitions against disclosures of SARs in 12 CFR 21.11(k) but would
enable an institution to file more complete, useful SARs without
substantively undermining the purposes of the SAR disclosure
prohibition.
After the posting of the proposed rule on the OCC website, but
before its publication in the Federal Register, Congress passed the
Anti-Money Laundering Act of 2020 (AMLA of 2020).\20\ The AMLA of 2020
included multiple provisions that will affect suspicious activity
reporting. Section 6202 of the AMLA of 2020 provides that SARs ``filed
under this subsection shall be guided by the compliance program of a
covered financial institution with respect to the Bank Secrecy Act,
including the risk assessment processes of the covered institution.''
Section 6212 of the AMLA of 2020 directs Treasury to establish a pilot
program on SAR sharing. Section 6204 of the AMLA Act of 2020 requires
the Treasury Secretary, in consultation with various relevant
stakeholders, to conduct a formal review of the financial institutions'
Currency Transaction Report (CTR) and SAR reporting requirements,
including processes for submission, regulations implementing the BSA,
and any
[[Page 15326]]
proposed changes to those reports to reduce unnecessary burdens while
ensuring that the reports continue to serve their intended purpose.
Certain provisions of the AMLA of 2020 may require the OCC to apply SAR
requirements in ways that may potentially conflict with the OCC's
current SAR regulation. While FinCEN has authority to address conflicts
between the AMLA of 2020 and FinCEN's regulations, either through
FinCEN's preexisting exemption authority or through authority granted
by the AMLA of 2020, the OCC's SAR regulations do not expressly permit
parallel exemptions. For example, FinCEN's pilot program on SAR sharing
might allow sharing of SARs in ways that would arguably be inconsistent
with the OCC's requirements on SAR confidentiality.\21\ The OCC's
adoption of exemption authority in its SAR regulation will remove any
legal uncertainty related to national banks and Federal savings
associations participation in such FinCEN programs.
---------------------------------------------------------------------------
\20\ Public Law 116-283 (Jan. 1, 2021).
\21\ 12 CFR 21.11(k); 12 CFR 163.180(d)(12).
---------------------------------------------------------------------------
III. The Proposal and Final Rule
The proposed rule would have allowed the OCC to issue exemptions
from the requirements of its SAR regulations. Specifically, the
proposed rule would have added a provision to 12 CFR 21.11 and 12 CFR
163.180 that would provide that the OCC may exempt a national bank or
Federal savings association from requirements in those regulatory
provisions. The OCC is finalizing the proposed rule with some
modifications, which are described below.\22\
---------------------------------------------------------------------------
\22\ This final rule, like the OCC's general SAR requirements,
applies to Federal branches and agencies of foreign banks licensed
or chartered by the OCC. See 12 CFR 21.11(a).
---------------------------------------------------------------------------
IV. Comments
The OCC received seven comments on its proposed rule.\23\ Some
commenters supported the proposed rule while others opposed it. Some
commenters noted that they support a regulatory framework that
encourages innovation and that the proposed rule would foster
responsible innovation and improve the quality of reporting over time.
---------------------------------------------------------------------------
\23\ The other agencies that simultaneously published proposed
rules received two additional comment letters that were not received
by the OCC; however, the OCC has considered and addressed those
comments in this SUPPLEMENTARY INFORMATION section. One comment
suggested that the agencies extend the comment period. The OCC
concluded that a longer comment period was not necessary, and an
extension of the comment period is not legally required.
---------------------------------------------------------------------------
A. Comments Opposing the Proposed Rule
Commenters opposing the proposed rule asserted that the proposed
rule provided no persuasive justification or authority to issue an
exemption. These commenters also suggested that the history of money
laundering and SAR deficiencies at major financial institutions is
inconsistent with the OCC adopting exemptions to the SAR requirements.
Commenters opposing the proposed rule also noted that criminals may
seek out financial institutions that have been granted exemptions and
that the proposed rule may jeopardize U.S. officials' access to a key
investigative tool. Also, according to these commenters, the rule
should address a significant Government Accountability Office (GAO)
report on SARs and CTRs.\24\
---------------------------------------------------------------------------
\24\ GAO, Anti-Money Laundering: Opportunities Exist to Increase
Law Enforcement Use of Bank Secrecy Act Reports, and Banks' Costs to
Comply with the Act Varied (Sept. 22, 2020), available at https://www.gao.gov/products/gao-20-574.
---------------------------------------------------------------------------
The OCC has evaluated these concerns and does not believe the final
rule will weaken reporting processes. The amendments in the final rule
will conform the OCC's exemption authority to FinCEN's exemption
authority. The OCC's SAR regulations and FinCEN's SAR regulation
feature significant overlap. Many SARs are required to be filed by both
FinCEN's SAR regulation and the OCC's SAR regulations. The final rule
will only allow the OCC to issue exemptions from the requirements of
the OCC's SAR regulations. Under the final rule, national banks and
Federal savings associations will continue to be required to comply
with FinCEN's SAR regulation. For requests requiring separate FinCEN
and OCC approvals, the OCC intends to coordinate with FinCEN, and
FinCEN would have to issue a parallel exemption. Currently, if FinCEN
issues an exemption or uses other authority to modify the application
of the requirements of its SAR regulations, the OCC may not be able to
issue a parallel exemption.
The final rule will maintain national banks' and Federal savings
associations' core reporting responsibilities. The final rule's
exemption authority, like FinCEN's exemption authority, is drafted
broadly and flexibly to handle unexpected situations. However, the OCC
does not expect to use this exemption authority to issue sweeping
exemptions that would undermine the value provided by SARs. The final
rule includes factors the OCC will consider before granting an
exemption, which will help ensure that any exemptions are appropriate.
While some commenters suggested that the OCC lacks legal authority
to issue the final rule, as discussed above, the OCC has broad
statutory authority to issue regulations for national banks and Federal
savings associations. For example, 12 U.S.C. 161 provides that the
Comptroller may call for ``special reports'' and 12 U.S.C. 93a provides
that the Comptroller ``is authorized to prescribe rules and regulations
to carry out the responsibilities of the office.'' \25\ The OCC has
long viewed SAR requirements and their predecessor reporting
requirements to be part of the OCC's mission of assuring safety and
soundness.\26\ The OCC's legal authority to require reports includes
the authority to modify reporting requirements and issue exemptions, if
appropriate.
---------------------------------------------------------------------------
\25\ See also 12 U.S.C. 1463(a)(2).
\26\ 12 U.S.C. 1.
---------------------------------------------------------------------------
One commenter suggested that the OCC consider GAO's 2020 report on
anti-money laundering compliance.\27\ The OCC considered this report,
which recommended that FinCEN better support the use of SARs by law
enforcement. This final rule will not affect the mechanisms that law
enforcement agencies use to access SARs. Also, the OCC could approve
exemptions that would result in additional SARs being filed, for
example, through the use of automation.\28\ The OCC will consider
whether any exemption request is consistent with the purposes of the
BSA, and these purposes include requiring reports or records that are
``highly useful'' in ``criminal, tax, or regulatory investigations.''
\29\ Accordingly, the OCC will consider the usefulness of potential
SARs that would be affected by an exemption request. In determining
whether an exemption request is consistent with the purposes of the
Bank Secrecy Act, the OCC intends to consult with FinCEN, as
appropriate.
---------------------------------------------------------------------------
\27\ GAO, Anti-Money Laundering: Opportunities Exist to Increase
Law Enforcement Use of Bank Secrecy Act Reports, and Banks' Costs to
Comply with the Act Varied (Sept. 22, 2020), available at https://www.gao.gov/products/gao-20-574.
\28\ See OCC Interpretive Letter 1166 (Sept. 27, 2019)
(recognizing automated SAR generation as consistent with SAR
regulation).
\29\ 31 U.S.C. 5311; 12 U.S.C. 1818(s)(1) (``Each appropriate
Federal banking agency shall prescribe regulations requiring insured
depository institutions to establish and maintain procedures
reasonably designed to assure and monitor the compliance of such
depository institutions with the requirements of subchapter II of
chapter 53 of Title 31.'').
---------------------------------------------------------------------------
The exemption authority in the final rule is consistent with the
OCC's support for the reallocation of bank
[[Page 15327]]
compliance resources to their most effective uses. The AMLA of 2020
provided that compliance programs should ensure that ``more attention
and resources of financial institutions should be directed toward
higher-risk customers and activities, consistent with the risk profile
of a financial institution, rather than toward lower risk customers and
activities.'' \30\ Accordingly, it may be appropriate to allow national
banks and Federal savings associations to tailor their monitoring for
suspicious activity so banks might not file SARs in certain specified
situations involving lower risk customers and activities. The agencies'
SAR regulations already contemplate lower risk scenarios by having
specific dollar thresholds below which financial institutions are not
required to file SARs. Similarly, it is unlikely that criminals will
target national banks and Federal savings associations that have
received exemptions, as one commenter suggested, because the OCC does
not expect to issue exemptions that would relieve national banks and
Federal savings associations of their general obligation to monitor for
suspicious activity or file appropriate SARs. The OCC will weigh any
potential for criminals to target a national bank or Federal savings
association in evaluating particular exemption requests. Should
information come to light after the OCC approves an exemption that
criminals are potentially targeting an institution because of its
exemption, the final rule provides the OCC with authority, at its sole
discretion, to revoke the exemption.
---------------------------------------------------------------------------
\30\ Section 6101(b)(2)(B)(ii), codified at 31 U.S.C.
5318(h)(2)(B)(iv)(II).
---------------------------------------------------------------------------
Some commenters suggested that the proposal was not supported by
adequate evidence and was therefore inconsistent with the requirements
of the Administrative Procedure Act. One commenter argued that the
proposed rule did not provide any data on costs or cost savings that
might accrue at a financial institution if a SAR exemption were granted
or on what financial institutions, if any, have requested SAR
exemptions in the past. The commenter noted that the proposed rule
estimates that only five financial institutions per year would request
SAR exemptions but provided no basis in research or data for that
prediction since it is possible that all financial institutions would
want an exemption.
The OCC acknowledges that it is difficult to predict exactly how
many or what type of exemptions might be requested or ultimately
granted. That is why the exemption language in the final rule, like
FinCEN's exemption language, is drafted broadly and flexibly. As
discussed above, this rule is intended to make the limited changes
necessary to match the exemption authority already possessed by FinCEN.
The OCC is not committing to offer or grant any particular exemptions.
The final rule only creates the authority to issue exemptions in the
future. The proposed rule included an estimate of five exemption
requests per year for purposes of the burden estimates required by the
Paperwork Reduction Act. However, this estimate of future exemption
requests is approximate and does not represent an estimate of exemption
requests that the OCC expects to actually grant. The OCC will carefully
examine any exemption requests received and may issue few or no
exemptions if they do not satisfy the OCC's scrutiny.
B. Process for Issuing Exemptions
The final rule contains some requirements that are not included in
FinCEN's SAR regulation. Under the final rule, for exemption requests
involving OCC-only SAR requirements, a national bank or Federal savings
association will be required to seek an exemption only from the OCC.
For exemption requests that will also require an exemption from
FinCEN's SAR regulation (for example, exemption requests related to SAR
filings required by 12 CFR 21.11(c)(4), related to SAR timing
requirements in 12 CFR 21.11(d), or related to SAR confidentiality in
12 CFR 21.11(k)), a national bank will need to seek and obtain an
exemption from both the OCC and FinCEN to be afforded exemptive
relief.\31\
---------------------------------------------------------------------------
\31\ The final rule, like the proposed rule, uses the term
``exemption'' while FinCEN's exemption authority in 31 CFR 1010.970
uses both the terms ``exemption'' and ``exception.'' The OCC does
not believe there is a substantive distinction between exemptions
and exceptions in this context.
---------------------------------------------------------------------------
Commenters suggested that the OCC work together with the other
Federal banking agencies and FinCEN to create one standard and one
system for any institution to use when applying for an exemption.
Similarly, commenters suggested that the OCC work together with the
other Federal banking agencies and FinCEN to create a single-filing
process whereby an OCC-supervised institution files solely with OCC and
any need for a FinCEN approval involving the same application would be
obtained by OCC. Commenters suggested that the agencies should
streamline the application process so that it is only necessary to seek
approval from a bank's prudential regulator. Commenters recommended
that the agencies not require institutions to duplicate work when
multiple agencies' approval is required.
One commenter suggested that the agencies use an interagency
rulemaking to create a single, streamlined SAR regulation that includes
a process for obtaining an exemption. According to this commenter, when
a bank requests an exemption, it should only have to submit a single
application to its primary prudential supervisor and not multiple
agencies. Other commenters recommended that the agencies provide
templates of application forms or similar tools to facilitate
applications.
The OCC acknowledges the value of a simple, straightforward
application process and the importance of coordination among the
agencies administering SAR requirements. The agencies are currently
coordinating and considering whether to provide specific forms or issue
guidance describing application processes in more detail. However, the
final rule only makes the limited textual changes to the OCC's SAR
regulations necessary to provide exemption authority paralleling
FinCEN's exemption authority. These limited changes do not preclude the
OCC or other agencies from taking additional action later to streamline
the process for requests for SAR exemptions.
Under the final rule, for exemption requests involving OCC-only SAR
requirements, a national bank or Federal savings association only needs
to seek an exemption from the OCC. For exemption requests that also
require an exemption from FinCEN's SAR regulation, a national bank or
Federal savings association will need to seek an exemption from both
the OCC and FinCEN.
One commenter suggested that the agencies reconcile differences
between their SAR exemption proposals. The proposed rule provided that
a national bank or Federal savings association ``requesting an
exemption that also requires an exemption from the requirements of
FinCEN's SAR regulation must submit a request in writing to both the
OCC and FinCEN for approval.'' The rules proposed by the Board, FDIC,
and NCUA provided that those agencies would have sought FinCEN's
concurrence for any exemption request that will also require an
exemption from FinCEN's SAR regulations. The OCC's final rule, like the
proposed rule, does not specifically provide for concurrence from
FinCEN, but this difference should not functionally affect applications
for exemptions. Under the proposed rules of any of the agencies,
financial
[[Page 15328]]
institutions would have have been required to submit applications to
both FinCEN and their functional regulator and receive approvals from
both.
The OCC intends to coordinate with the other agencies to develop
standardized procedures or forms for handling certain exemption
requests. This is consistent with past practice where the agencies have
developed such processes or forms after issuing underlying regulations.
For example, certain OCC regulations require OCC ``prior approval''
before national banks and Federal savings associations take particular
actions, and the OCC has separately issued the licensing forms and
procedures necessary to obtain this approval.\32\ The final rule only
makes the limited changes to the OCC's SAR regulations necessary to
clarify its authority to issue exemptions.
---------------------------------------------------------------------------
\32\ See, e.g., 12 CFR 5.45 and 5.46 (requiring prior approval
for certain increases in capital). Separate licensing forms provide
a mechanism for this approval, available at https://www.occ.gov/publications-and-resources/publications/comptrollers-licensing-manual/files/licensing-filing-forms.html.
---------------------------------------------------------------------------
Under the final rule, a national bank or Federal savings
association requesting an exemption from the requirements of 12 CFR
21.11 or 12 CFR 163.180 must submit a request in writing to the OCC.
C. Standards for Issuing an Exemption
The proposed rule listed separate factors that the OCC would
consider for exemptions involving OCC-only exemptions versus exemptions
that would also require exemptions from FinCEN. The final rule,
however, provides a single set of factors that the OCC will consider
for all exemption requests. Specifically, upon receipt of any exemption
request, the OCC will consider whether the exemption is consistent with
the purposes of the BSA and with safe and sound banking, and may
consider other appropriate factors.
Commenters raised a variety of concerns about these factors. One
commenter stated that the proposed exemption authority contains no
limitations or caveats and argued that the absence of additional
standards, criteria, and procedures renders the proposed rule
unworkable and susceptible to legal challenge. Similarly, this
commenter stated that the proposed rule did not address how supervisory
concerns related to BSA/AML deficiencies or a lower supervisory rating
due to repeated deficiencies would affect the exemption process. The
commenter also observed that the proposed rule provided no process for
an internal supervisory review or audit of the SAR exemption decisions
being made by the OCC, which raises concerns about consistent decision-
making. Similarly, another commenter stated that the proposed rule is
overly broad and could inadvertently permit the wholesale exemption of
entire institutions or categories of institutions from SAR
requirements. According to this commenter, the proposed rule does not
provide concrete standards or a clear process, and the deficiencies
could be exploited, running counter to the interests of financial
transparency and anti-money laundering objectives.
Another commenter suggested that the agencies specify additional
factors they may consider when evaluating exemption requests.
Specifically, the commenter suggested that the agencies should consider
whether the bank's exemption request would, if granted, improve law
enforcement and other end users' use of SAR data (e.g., the request
increases submission speed and enhances data consistency) or allow the
requesting bank to reallocate resources to higher value monitoring and
reporting processes. Another commenter suggested that, in reviewing a
request, the agencies should consider whether the exemption would, if
granted, enhance usefulness to law enforcement and whether the
exemption would, if granted, enable the institution to redeploy
resources in a manner suitable for the institution.
Another commenter expressed concern that the proposal's singular
focus on high-tech solutions will disadvantage small and mid-sized
institutions that cannot afford, build, or implement such novel,
innovative solutions to meet their SAR requirements. According to this
commenter, smaller institutions still struggle under manual SAR
processes and lower-tier technology. Another commenter stated that it
was unclear how the proposed rule would cover other institutions
besides traditional national banks and Federal savings associations,
including branches and agencies of foreign banks, trust companies, and
service corporations.
Another commenter suggested that the agencies provide clear
guidance governing how exemption requests will be evaluated and how the
various considerations will be weighed, such as whether more weight
will be given to broad machine learning applications and algorithms or
whether the agencies will favor requests that focus on cost and time
savings, regardless of technical sophistication. The commenter
expressed concerns that requests submitted by small institutions may
not be able to match the technology used by larger institutions.
The OCC acknowledges the concerns raised by these commenters and
expects to consider various potential factors when evaluating requests.
However, it is difficult to anticipate every possible exemption
request, and, as a consequence, rigid or inflexible procedures could
limit the OCC's future ability to consider, and deny or issue,
exemptions. FinCEN's regulation authorizing exemptions does not contain
a prescribed list of factors that will be considered before exemptions
are issued.\33\ Nor does FinCEN's regulation describe the process
FinCEN will use when evaluating an exemption request. It would create
inconsistency and be potentially problematic for the OCC's regulation
to include factors or processes that are not included in FinCEN's
regulation. That would make the exemption provisions not truly parallel
and could pose difficulties for financial institutions applying for
exemptions. For example, financial institutions might have to submit
different applications to the OCC and FinCEN to address different
potential factors and processes. This would create an additional burden
and would undermine the value of creating parallel exemption processes.
---------------------------------------------------------------------------
\33\ 31 CFR 1010.970(a).
---------------------------------------------------------------------------
The final rule contains a set of factors that the OCC will consider
in reviewing all requests in addition to considering ``any other
appropriate factor.'' Specifically, the OCC will consider whether the
exemption is consistent with the purposes of the BSA and with safe and
sound banking, and may consider other appropriate factors. Although
FinCEN's general exemption provision, 31 CFR 1010.970(a), does not have
these factors, these are the same factors that the OCC and FinCEN
consider as part of exemption determinations involving customer
identification program requirements.\34\ The OCC has determined that it
is appropriate to commit to considering them in the context of
suspicious activity reporting because they should be relevant to any
request for an exemption. The OCC's commitment to considering these
factors should not promote inconsistency with FinCEN since the OCC does
not expect FinCEN to issue exemptions that would be inconsistent with
these factors. Requiring consideration of these factors
[[Page 15329]]
will help ensure that any issued exemptions are appropriate. Although
the OCC acknowledges the relevance of other factors raised by the
commenters (such as the different technological resources of large
versus small financial institutions), it is not appropriate or
necessary to embed such factors into the regulation itself. Many of the
additional factors suggested by commenters are already covered by the
three factors in the final rule.
---------------------------------------------------------------------------
\34\ 31 CFR 1020.220(b) (``The Federal functional regulator and
the Secretary shall consider whether the exemption is consistent
with the purposes of the Bank Secrecy Act and with safe and sound
banking, and may consider other appropriate factors.'').
---------------------------------------------------------------------------
The final rule provides that the OCC will consider ``any other
appropriate factors,'' and the OCC expects to consider other factors
that may be relevant to particular exemption requests. The OCC's SAR
regulations apply to all national banks and Federal savings
associations, and the new exemption language will similarly cover all
national banks and Federal savings associations. Although it is
possible that the terms of certain exemptions may be tailored to
particular types of national banks or Federal savings associations (for
example, trust banks), the OCC will not pre-judge how exemptions may be
applied to different types of national banks and Federal savings
association. FinCEN's exemption provision does not distinguish between
different types of banking organizations, and it would be inconsistent
for the OCC's exemption provision to do this. The final rule, like the
OCC's SAR regulations, applies to Federal branches and agencies of
foreign banks licensed or chartered by the OCC.
In the proposed rule, the list of factors that the OCC would
consider for exemption requests that would not require an exemption
from FinCEN did not include considering whether the exemption was
consistent with the purposes of the BSA. (The proposal included this
factor for requests that would also require an exemption from FinCEN.)
The reporting requirements now contained in the OCC's SAR regulations
predate the BSA and continue to be broader than FinCEN's SAR
requirements in certain ways (i.e., requiring SARs in certain
situations that would not require SARs under FinCEN's SAR regulation).
However, the OCC agrees with the arguments made by certain commentators
and has determined it is reasonable to consider whether any exemption
request is consistent with the purposes of the BSA, regardless of
whether the exemption request implicates FinCEN's SAR regulation. The
proposed rule explained how the BSA and successive legislation has
shaped reporting requirements and developed the current SAR regime.
Also, it could be inconsistent and confusing to consider separate sets
of factors for OCC-only SAR exemptions versus requests requiring
exemptions from both the OCC and FinCEN. The proposed rule specified
that the OCC would consider any ``appropriate factors,'' and the OCC is
now specifying that whether a request is consistent with the purposes
of the BSA is such an appropriate factor for all exemption requests.
The proposed rule explained the background and history of the SAR
requirements and detailed the interaction between the OCC's SAR
requirements and the BSA, which establishes how the BSA is still
relevant to OCC-only SAR requirements.
Some commenters recommended that the OCC consider additional
factors as part of exemption determinations. However, the final rule
already covers many of the factors identified by commenters. One
commenter suggested that the agencies should consider whether an
exemption request will improve law enforcement and other BSA end users'
use of SAR data. However, the statutory purposes of the BSA include
requiring reports that are ``highly useful'' to various users of SARs,
including law enforcement. Another commenter suggested that the
proposed rule did not explain how supervisory concerns related to BSA/
AML deficiencies or a lower CAMELS rating \35\ due to repeated
deficiencies would affect the exemption process. Those supervisory
concerns would implicate all of the factors listed in the final rule.
The OCC would not likely approve an exemption request when a national
bank or Federal savings association previously failed to prevent money
laundering or if granting the exemption could contribute to unsafe or
unsound practices. ``[O]ther appropriate factors'' could also include
outstanding supervisory concerns regarding BSA/AML compliance.
---------------------------------------------------------------------------
\35\ The Uniform Financial Institutions Rating System, commonly
referred to as the CAMELS rating system.
---------------------------------------------------------------------------
The OCC and other agencies have already provided guidance on the
principles relevant to responsible innovation that are applicable to
innovative approaches for complying with SAR requirements.
Specifically, the OCC has ``define[d] Responsible Innovation as the use
of new or improved financial products, services and processes to meet
the evolving needs of consumers, businesses, and communities in a
manner that is consistent with sound risk management and is aligned
with the bank's overall business strategy.'' \36\ Similarly, in 2018
FinCEN and the Federal banking agencies issued a statement encouraging
banks to take innovative approaches to meet their BSA/AML compliance
obligations.\37\ That statement explained that banks are encouraged to
consider, evaluate, and, when appropriate, responsibly implement
innovative SAR compliance approaches.
---------------------------------------------------------------------------
\36\ https://www.occ.gov/topics/supervision-and-examination/responsible-innovation/index-responsible-innovation.html.
\37\ Joint Statement on Innovative Efforts to Combat Money
Laundering and Terrorist Financing (Dec. 3, 2018), available at
https://www.occ.gov/news-issuances/news-releases/2018/nr-occ-2018-130a.pdf.
---------------------------------------------------------------------------
Pursuant to the final rule, a national bank or Federal savings
association requesting an exemption from the requirements of the OCC's
SAR regulations will have to submit a request in writing to the OCC
(and potentially also to FinCEN). Upon receiving a written request from
a national bank or Federal savings association, the OCC will consider
the request and provide a written response.
The OCC may notify the other Federal banking agencies or FinCEN and
consider their comments before granting any exemption. The final rule
provides that the OCC may grant an exemption for a specified time
period. One commenter stated that the proposed rule's broad statement
that it ``may be conditional or unconditional, may apply to particular
persons or to classes of persons, and may apply to transactions or
classes of transactions'' offered no guidance on the menu of available
relief measures or which measures should be used in which
circumstances. This language arises from the regulation that includes
FinCEN's exemption authority.\38\ The OCC removed this language from
the final rule to avoid any confusion and because the OCC has not used
language like this in exemption provisions in other regulations.\39\
The removal of this language should not have any substantive effect in
the context of the OCC's SAR regulations or limit the OCC's ability to
issue exemptions.
---------------------------------------------------------------------------
\38\ 31 CFR 1010.970.
\39\ See, e.g., 12 CFR 100.2 (``The Comptroller of the Currency
may, for good cause and to the extent permitted by statute, waive
the applicability of any provision of parts 1 through 197 of this
chapter I, as applicable, with respect to Federal savings
associations.''). Similarly, other FinCEN exemption provisions have
not used language like this. See, e.g., 31 CFR 1020.220(b).
---------------------------------------------------------------------------
D. Issuance of Exemptions, Publication, and Modifications
The proposed rule provided that the OCC would provide a written
response to a national bank or Federal savings association that submits
an exemption request. Commenters suggested that the OCC provide a clear
timeline for responding to a request for an
[[Page 15330]]
exemption, for example 30 days or 45 days. Several commenters suggested
that the OCC should publish approved exemption decisions so that other
financial institutions are aware of the OCC's analysis regarding a
particular process or new technology (and would not have to apply
separately for exemptions). One commenter recommended that the agencies
clarify how they will handle requests may contain trade secrets,
proprietary information, and other sensitive business information.
The OCC recognizes the value of a timely, transparent review and
decision process, and the OCC, in consultation with the other agencies,
may develop standardized timelines for the consideration of requests or
the publication of any exemptions. However, at present, including such
procedures within the OCC's regulation would be inconsistent with
FinCEN's exemption regulation. The OCC, in consultation with the other
agencies, also is reviewing and potentially revising SAR requirements
as part of changes made by the AMLA of 2020. The OCC, in consultation
with the other agencies, may refine SAR requirements in ways that align
with the commenters' concerns, but it is not possible to make these
commitments while other potential SAR changes are still ongoing. This
final rule only makes the limited and incremental changes necessary for
the OCC's exemption authority to be consistent with FinCEN's rule. The
OCC routinely handles sensitive or confidential information submitted
by national banks and Federal savings associations, and the OCC expects
to follow appropriate protocols in handling any such information
submitted along with exemption requests.
The OCC acknowledges commenters' concerns about making approved
exemptions public and transparent. The final rule does not resolve
whether or not the OCC will publish approved exemptions or redacted
versions of them. The OCC expects to determine whether publication is
appropriate in the course of developing standardized procedures for
handling exemptions and in coordination with FinCEN and the other
Federal banking agencies. The OCC also notes that, to the extent that
an exemption request involves a substantive legal interpretation or
action, such determinations are regularly published by the OCC with
appropriate redactions.
Several comments addressed the process for issuing an exemption,
including recommending governance mechanisms to ensure the
accountability of OCC officials making exemption decisions. The OCC
takes such process concerns seriously but does not believe it is
appropriate to address them in this regulation. The OCC has separate
governance mechanisms to address the appropriate delegation of
authority within its organizational structure. It would be anomalous to
embed additional internal rules of agency procedure within the OCC's
SAR regulations. Additionally, such process requirements would be
inconsistent with FinCEN's exemption provision and would undermine the
value of consistent exemption provisions.
One commenter recommended that the agencies should make it clear
that banks are not required to run parallel systems by running both
their existing process and the innovative process simultaneously.
Although the OCC expects to resolve this issue in specific exemption
requests, the OCC notes that the Interagency Statement on Innovative
Efforts to Combat Money Laundering and Terrorist Financing states
``that pilot programs undertaken by banks, in conjunction with existing
BSA/AML processes, are an important means of testing and validating the
effectiveness of innovative approaches.'' \40\
---------------------------------------------------------------------------
\40\ See ``Joint Interagency Statement on Innovative Efforts to
Combat Money Laundering and Terrorist Financing 2,'' (Dec. 3, 2018),
available at https://www.occ.gov/news-issuances/news-releases/2018/nr-occ-2018-130a.pdf.
---------------------------------------------------------------------------
Under the proposed rule, the OCC also could have revoked previously
granted exemptions. The proposed rule provided that the OCC would
provide written notice to a national bank or Federal savings
association of the OCC's intention to revoke an exemption. The notice
would have included the basis for the revocation and would provide an
opportunity for the national bank or Federal savings association to
submit a response to the OCC. One commenter stated that the proposed
rule offers no standards or criteria for determining when to extend or
revoke a SAR exemption. Another commenter suggested that the OCC create
an appeal process so an applicant may make changes and re-submit
without having to completely re-apply for an exemption. One commenter
recommended giving financial institutions a timeline for revocation so
they have the opportunity to prepare and re-direct resources. Another
commenter recommended that, before an exemption is revoked, the
agencies should provide reasonable notice to allow the institution
ample time to reinstitute and test their pre-existing SAR monitoring
processes. Another commenter recommended that the rule's procedures
should include an appeal mechanism or second review so that a denied
application can be revised or amended to address any objections raised
by an agency. Another commenter suggested that the agencies should
provide a sufficient timeline before revoking an exemption.
The OCC is finalizing the revocation provisions as proposed.
FinCEN's exemption provision provides that exemptions ``shall be
revocable in the sole discretion of the Secretary.'' \41\ The OCC
similarly believes it is appropriate to communicate in the final rule
that exemptions are not permanent and may be revoked. Although the OCC
recognizes the potential value of the additional procedures or checks
suggested by the commenters (for example, an appeal mechanism), it is
unnecessary to include such features and internal processes in the
regulation. The final rule provides for an opportunity for notice and
response before revocation, which would promote fairness and due
process. In addition, additional procedures or checks would be
inconsistent with FinCEN's regulation. To support a coordinated
regulatory response, the OCC intends to cooperate with FinCEN when
considering whether to revoke an exemption, to the extent possible.
Although the OCC plans to carefully evaluate exemption requests so as
to avoid where possible the need for revocation, it would be
inappropriate to add other mandatory pre-revocation procedures because
the procedures could interfere with the potential need for expedited
revocation.
---------------------------------------------------------------------------
\41\ 31 CFR 1010.970(a).
---------------------------------------------------------------------------
E. Other Comments
Several commenters raised issues not directly relevant to this
rulemaking. One commenter supported a broader effort to review and
harmonize supervisory expectations, perhaps even through a single
rulemaking. Another commenter supported other efforts to improve SAR
regulations, including a streamlined form, narrative improvements, and
reporting thresholds. Another commenter recommended that the agencies
recognize the new priorities in the AMLA of 2020, including the goal to
update and modernize the overall AML system. One commenter suggested
that the agencies change the focus in their proposed rules to recognize
that the goal is providing useful information for law enforcement
through the risk-based approach while also protecting the financial
institution and confidence in the banking system.
[[Page 15331]]
The OCC is undertaking reviews of, and potentially changes to,
reporting requirements as part of implementing the AMLA of 2020. The
OCC will evaluate these comments in the context of this broader review
of SAR requirements and AML requirements generally. This final rule
only makes the limited, incremental changes necessary to conform the
OCC's SAR exemption authority to FinCEN's.
V. Administrative Law Matters
A. Congressional Review Act
For purposes of the Congressional Review Act, the Office of
Management and Budget (OMB) makes a determination as to whether a final
rule constitutes a ``major'' rule.\42\ If OMB deems a final rule is
``major,'' the Congressional Review Act generally provides that the
rule may not take effect until at least 60 days following its
publication.\43\ The Congressional Review Act defines a ``major rule''
as any rule that the Administrator of the Office of Information and
Regulatory Affairs of the OMB finds has resulted in or is likely to
result in (1) an annual effect on the economy of $100 million or more;
(2) a major increase in costs or prices for consumers, individual
industries, Federal, state, or local government agencies or geographic
regions, or (3) a significant adverse effects on competition,
employment, investment, productivity, innovation, or on the ability of
U.S.-based enterprises to compete with foreign-based enterprises in
domestic and export markets.\44\ As required by the Congressional
Review Act, the OCC will submit the final rule and other appropriate
reports to Congress and the GAO for review.
---------------------------------------------------------------------------
\42\ 5 U.S.C. 801 et seq.
\43\ 5 U.S.C. 801(a)(3).
\44\ 5 U.S.C. 804(2).
---------------------------------------------------------------------------
B. Solicitation of Comments and Use of Plain Language
Section 722 of the Gramm-Leach-Bliley Act \45\ requires the Federal
banking agencies to use plain language in all proposed and final rules
published after January 1, 2000. The agencies sought to present the
final rule in a simple, straightforward manner and did not receive any
comments on the use of plain language in the proposed rule.
---------------------------------------------------------------------------
\45\ Public Law 106-102, sec. 722, 113 Stat. 1338, 1471 (1999),
codified at 12 U.S.C. 4809.
---------------------------------------------------------------------------
C. Paperwork Reduction Act
Certain provisions of the final rule contain are a ``collection of
information'' within the meaning of the Paperwork Reduction Act (PRA)
of 1995 (44 U.S.C. 3501-3521). In accordance with the act's
requirements, agencies may not conduct or sponsor, and a respondent is
not required to respond to, an information collection unless it
displays a currently valid OMB control number. The OCC reviewed the
rule and determined that it revises information collection requirements
previously approved by the OMB under OMB Control No. 1557-0180. The OCC
submitted the revised information collection to the OMB for review
under section 3507(d) of the PRA (44 U.S.C. 3507(d)) and Sec. 1320.11
of the OMB's implementing regulations (5 CFR 1320).
Current Actions. The rule revises 12 CFR 21.11 and 12 CFR 163.180
to allow national banks and Federal savings associations to submit
written requests for exemptions from the requirements of the OCC's SAR
regulations. The burden estimates below are based on the estimated
number of national banks and Federal savings associations that might
request exemptions each year and the estimated number of hours required
to submit a request.
Title of Information Collection: Minimum Security Devices and
Procedures, Reports of Suspicious Activities, and Bank Secrecy Act
Compliance Program.
Frequency: Event generated.
Affected public: Businesses or other for-profit.
Estimated number of respondents: 5.
Total estimated annual burden: 250 hours.
D. Regulatory Flexibility Act
In general, the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et
seq.) requires an agency, in connection with a final rule, to prepare a
final regulatory flexibility analysis describing the rule's impact on
small entities (defined by the Small Business Administration for
purposes of the RFA to include commercial banks and savings
institutions with total assets of $600 million or less and trust
companies with total assets of $41.5 million or less). However, under
section 605(b) of the RFA, this analysis is not required if an agency
certifies that the rule will not have a significant economic impact on
a substantial number of small entities and publishes its certification
and a short explanatory statement in the Federal Register along with
its rule.
The OCC currently supervises approximately 1,117 institutions
(national banks, trust companies, Federal savings associations, and
branches or agencies of foreign banks, collectively banks), of which
669 are small entities.\46\ Because the final rule imposes no new
mandates, it will have only de minimis costs to OCC-supervised small
entities. Therefore, the OCC certifies that the final rule will not
have a significant economic impact on a substantial number of small
entities. Accordingly, a final regulatory flexibility analysis is not
required.
---------------------------------------------------------------------------
\46\ Consistent with the General Principles of Affiliation 13
CFR 121.103(a), the OCC counts the assets of affiliated financial
institutions when determining whether it should classify an
institution as a small entity. The OCC used December 31, 2020, to
determine size because a ``financial institution's assets are
determined by averaging the assets reported on its four quarterly
financial statements for the preceding year.'' See footnote 8 of the
U.S. Small Business Administration's Table of Size Standards.
---------------------------------------------------------------------------
E. Riegle Community Development and Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the Riegle Community Development and
Regulatory Improvement Act (RCDRIA) of 1994 (12 U.S.C. 4802(a)) in
determining the effective date and administrative compliance
requirements for new regulations that impose additional reporting,
disclosure, or other requirements on insured depository institutions,
the OCC must consider, consistent with principles of safety and
soundness and the public interest (1) any administrative burdens that
the final rule would place on depository institutions, including small
depository institutions and customers of depository institutions, and
(2) the benefits of the final rule. In addition, section 302(b) of
RCDRIA requires new regulations and amendments to regulations that
impose additional reporting, disclosures, or other new requirements on
insured depository institutions generally to take effect on the first
day of a calendar quarter that begins on or after the date on which the
regulations are published in final form.\47\ The OCC considered the
changes made by this final rule and believes that the effective date of
May 1, 2022, will provide OCC-regulated institutions with adequate time
to comply with the rule. The final rule will not impose any new
administrative compliance requirements, and the OCC believes that the
burdens of preparing a request for exemption are justified by the
agency's need to evaluate information and factors relevant to the
exemption request and to promote consistency.
---------------------------------------------------------------------------
\47\ 12 U.S.C. 4802(b).
---------------------------------------------------------------------------
F. OCC Unfunded Mandates Reform Act of 1995
The OCC analyzed the final rule under the factors in the Unfunded
Mandates Reform Act (UMRA) of 1995
[[Page 15332]]
2 U.S.C. 1501 et seq. Under this analysis, the OCC considered whether
the final rule includes a Federal mandate that may result in the
expenditure by state, local, and tribal governments, in the aggregate,
or by the private sector, of $100 million or more in any one year ($157
million as adjusted annually for inflation). The UMRA does not apply to
regulations that incorporate requirements specifically set forth in
law.
The final rule will not impose new mandates on any national banks
or Federal savings associations. Therefore, the OCC concludes that the
final rule will not result in an expenditure of $157 million or more
annually by state, local, and tribal governments, or by the private
sector. As a result, the OCC finds that the final rule does not trigger
the UMRA cost threshold. Accordingly, the OCC has not prepared the
written statement described in section 202 of the UMRA.
List of Subjects
12 CFR Part 21
Crime, Currency, National banks, Reporting and recordkeeping
requirements, Security measures.
12 CFR Part 163
Accounting, Administrative practice and procedure, Advertising,
Crime, Currency, Investments, Mortgages, Reporting and recordkeeping
requirements, Savings associations.
Authority and Issuance
For the reasons stated in the SUPPLEMENTARY INFORMATION, chapter I
of title 12 of the Code of Federal Regulations is amended as follows:
PART 21--MINIMUM SECURITY DEVICES AND PROCEDURES, REPORTS OF
SUSPICIOUS ACTIVITIES, AND BANK SECRECY ACT COMPLIANCE PROGRAM
0
1. Revise the authority citation for part 21 to read as follows:
Authority: 12 U.S.C. 1, 93a, 161, 1462a, 1463, 1464, 1818, 1881-
1884, and 3401-3422; 31 U.S.C. 5318.
0
2. In Sec. 21.11, add paragraph (m) to read as follows:
Sec. 21.11 Suspicious Activity Report.
* * * * *
(m) Exemptions. (1) The Office of the Comptroller of the Currency
(OCC) may grant a national bank an exemption from the requirements of
this section. A national bank requesting an exemption must submit a
request in writing to the OCC. In reviewing such requests, the OCC will
consider whether the exemption is consistent with the purposes of the
Bank Secrecy Act (if applicable) and safe and sound banking, and may
consider other appropriate factors. Any exemption will apply only as
expressly stated in the exemption. (A national bank requesting an
exemption that also requires relief from the requirements of applicable
regulations issued by the Department of the Treasury at 31 CFR chapter
X must submit a request in writing to both the OCC and FinCEN for
approval.)
(2) The OCC will respond in writing to a national bank that submits
a request pursuant to paragraph (m)(1) of this section after
considering whether the exemption is consistent with the factors in
paragraph (m)(1) of this section. Any exemption granted by the OCC
under paragraph (m)(1) of this section will continue for the time
specified by the OCC.
(3) The OCC may extend the period of time or may revoke an
exemption granted under paragraph (m)(1) of this section. Exemptions or
extensions may be revoked in the sole discretion of the OCC. Before
revoking an exemption, the OCC will provide written notice to the
national bank of the OCC's intention to revoke an exemption. Such
notice will include the basis for the revocation and will provide an
opportunity for the national bank to submit a response to the OCC. The
OCC will consider any response before deciding whether or not to revoke
an exemption and provide written notice to the national bank of the
OCC's final decision to revoke an exemption.
(4) With respect to requests for exemptions that will also require
relief from the requirements of applicable regulations issued by the
Department of the Treasury at 31 CFR chapter X, upon receiving approval
from both the OCC and FinCEN, the requestor will be relieved of its
obligations under this section to the extent stated in such approvals.
PART 163--SAVINGS ASSOCIATIONS--OPERATIONS
0
3. Revise the authority citation for part 163 to read as follows:
Authority: 12 U.S.C. 1, 93a, 1462a, 1463, 1464, 1467a, 1817,
1820, 1828, 1831o, 3806, 5101 et seq., 5412(b)(2)(B); 31 U.S.C.
5318; 42 U.S.C. 4106.
0
4. In Sec. 163.180, add paragraph (f) to read as follows:
Sec. 163.180 Suspicious Activity Reports and other reports and
statements.
* * * * *
(f) Exemptions. (1) The OCC may grant a Federal savings association
or service corporation an exemption from the requirements of this
section. A Federal savings association or service corporation
requesting an exemption must submit a request in writing to the OCC. In
reviewing such requests, the OCC will consider whether the exemption is
consistent with the purposes of the Bank Secrecy Act (if applicable)
and safe and sound banking, and may consider other appropriate factors.
Any exemption will apply only as expressly stated in the exemption. (A
Federal savings association or service corporation requesting an
exemption that also requires relief from the requirements of applicable
regulations issued by the Department of the Treasury at 31 CFR chapter
X must submit a request in writing to both the OCC and FinCEN for
approval.)
(2) The OCC will respond in writing to the Federal savings
association or service corporation that submits a request pursuant to
paragraph (f)(1) of this section after considering whether the
exemption is consistent with the factors in paragraph (f)(1) of this
section. Any exemption granted by the OCC under paragraph (f)(1) of
this section will continue for the time specified by the OCC.
(3) The OCC may extend the period of time or may revoke an
exemption granted under paragraph (f)(1) of this section. Exemptions or
extensions may be revoked in the sole discretion of the OCC. Before
revoking an exemption, the OCC will provide written notice to the
Federal savings association or service corporation of the OCC's
intention to revoke an exemption. Such notice will include the basis
for the revocation and will provide an opportunity for the Federal
savings association or service corporation to submit a response to the
OCC. The OCC will consider any response before deciding whether or not
to revoke an exemption and provide written notice to the Federal
savings association or service corporation of the OCC's final decision
to revoke an exemption.
(4) With respect to requests for exemptions that will also require
relief from the requirements of applicable regulations issued by the
Department of the Treasury at 31 CFR chapter X, upon receiving approval
from both the OCC and FinCEN, the requestor will be relieved of its
obligations under this section to the extent stated in such approvals.
Michael J. Hsu,
Acting Comptroller of the Currency.
[FR Doc. 2022-05521 Filed 3-17-22; 8:45 am]
BILLING CODE 4810-33-P
