FinCEN Proposes Overhaul of AML/CFT Rules for Financial Institutions
FinCEN issued a proposed rule on April 7 to revise AML/CFT compliance requirements under the Bank Secrecy Act.
Why it matters: The changes could significantly reshape compliance programs for banks and other financial entities. Legal and compliance teams must adapt to ensure effective risk-based controls—and avoid new regulatory pitfalls.
- The proposal shifts focus from technical compliance to program effectiveness in stopping illicit finance.
- Risk-based resource allocation is encouraged, especially for higher-risk clients and activities.
- Banks must appoint a U.S.-based compliance officer accessible to regulators.
- Comments on the proposal are due by June 9, 2026.
On April 7, 2026, the Financial Crimes Enforcement Network (FinCEN) issued a Notice of Proposed Rulemaking (NPRM), aiming to modernize anti-money laundering and countering the financing of terrorism (AML/CFT) requirements for financial institutions under the Bank Secrecy Act.
- The proposal emphasizes program effectiveness—not just adherence to technical requirements—by distinguishing between failures in program design and failures in execution.
- Banks and other covered institutions are urged to distribute more compliance resources to higher-risk customers and activities, shifting away from blanket approaches that treat all clients and transactions equally.
- Independent testing and audit expectations are clarified, ensuring risk-based judgment is prioritized over subjective examiner assessments.
- According to Secretary of the Treasury Scott Bessent: "Our proposal restores common sense with a focus on keeping bad actors out of the financial system, not burying America's banks in more red tape."
- The new rule integrates statutory changes from the Anti-Money Laundering Act of 2020 and supersedes FinCEN’s previous proposal from July 3, 2024.
The Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), and the National Credit Union Administration (NCUA) have jointly issued parallel proposals to align their regulatory frameworks with FinCEN’s approach. These would require banks to implement AML/CFT programs designed to "identify, assess, and mitigate risks of illicit finance" and designate a U.S.-based compliance officer who is accessible to federal regulators.
The NPRM also introduces options for information sharing with FinCEN and expands who within a bank can approve AML/CFT programs, adding flexibility for governance structures. The public has until June 9, 2026 to submit comments.
These proposed changes mark a fundamental shift toward outcomes-focused regulation as federal agencies seek to boost the impact of the BSA while reducing unnecessary regulatory burden. For more analysis, see industry commentary.
By the numbers:
- April 7, 2026 — Date FinCEN issued the Notice of Proposed Rulemaking
- June 9, 2026 — Public comment deadline for the proposal
- July 3, 2024 — Previous proposed rule now withdrawn
What's next: The NPRM will be published in the Federal Register and is open for public comment until June 9, 2026.