Federal Reserve Issues AML/CFT Program Notice of Proposed Rulemaking

Overview

On July 7, 2026, the Board of Governors of the Federal Reserve System (the “Board”) issued a Notice of Proposed Rulemaking (the “Board NPRM”)[1] that would modernize AML/CFT program requirements applicable to Board-supervised institutions.[2] The proposal parallels the AML/CFT program reforms proposed by the Financial Crimes Enforcement Network (“FinCEN”), the Office of the Comptroller of the Currency (“OCC”), the Federal Deposit Insurance Corporation (“FDIC”), and the National Credit Union Administration (“NCUA”) (collectively, the “Agencies”) in April 2026.[3] At the same time, the Board’s proposal deviates from the Agencies’ proposals in two principal ways.

• First, FinCEN’s proposal would impose certain requirements on the OCC, the FDIC, the NCUA and the Board (collectively, the “FBAs”) when they are acting pursuant to their Bank Secrecy Act (“BSA”) examination authority delegated by FinCEN under 31 C.F.R. § 1010.810(b). Although FinCEN has delegated certain examination authority to the FBAs, it has not delegated its civil enforcement authority under the BSA, which remains vested in FinCEN.[4] Consequently, the FBAs would be required to provide advance notice to FinCEN before initiating a significant AML/CFT supervisory action, provide supporting supervisory materials to FinCEN, and consider any views FinCEN provides regarding the effectiveness of the relevant institution’s AML/CFT program.[5] FinCEN noted that the consultation framework applies only to supervisory actions taken pursuant to its delegated authority because the FBAs continue to exercise their own independent enforcement authorities.[6] But in a footnote to its proposed rule, FinCEN noted that it anticipates the Agencies imposing a similar consultation requirement when the Agencies act under other laws.[7] In its proposal, FinCEN described this consultation framework as a central component of its effort to modernize AML/CFT supervision and to promote greater consistency across institutions supervised by the FBAs.[8] Regarding the objective of consistency, the OCC, FDIC and NCUA stated that a key goal of their proposal is to enhance FinCEN’s role in the AML/CFT enforcement and supervisory process.[9] The Board NPRM, however, does not include the supervisory consultation framework proposed by the Agencies.
• Second, to further the goal of enhancing FinCEN’s role, the OCC, FDIC and NCUA included in their proposal provisions that would broadly authorize institutions they supervise to share confidential supervisory information (“CSI”) with FinCEN relating to an AML/CFT enforcement action or significant AML/CFT supervisory action. The Board NPRM does not include a similar CSI authorization.

The Board requests comment on all aspects of the proposal, but poses 29 specific questions in response to which it is seeking comment. One question is whether similar consultation and information sharing provisions should be incorporated into its final rule.[10]

Comments on the proposal are due 61 days after publication in the Federal Register, which is September 8, 2026.

Observations

• The Board NPRM signals that the FBAs and FinCEN are generally aligned on the specific AML/CFT program requirements that should apply to the institutions they regulate. Although final rule text remains to be seen, the Board’s alignment with the Agencies on the text of program requirements could potentially reduce the concern that banking organizations may be subject to different requirements depending on who supervises them and the specific examiners with whom they work.
• The implications of the fact that the Board NPRM does not include the consultation framework and broad CSI authorization are not entirely clear. The consultation mechanism represented an effort to try and ensure consistency between AML-related enforcement and significant AML/CFT supervisory actions on the one hand, and AML policy on the other. It is not clear what will happen with the consultation mechanism if the Board does not participate.

Because of the alignment on AML/CFT program obligations, the Board NPRM introduces many of the same challenges presented by the Agencies’ proposals and that have been addressed in comment letters from stakeholders. One such challenge is that certain standards articulated in the proposal were insufficiently defined.[11]