Fed Proposes Evidence-Based Shift in Bank AML Oversight

The Bank Secrecy Act requires US banks to maintain systems to combat money laundering and terrorist financing. The Federal Reserve’s proposed rule would shift supervisory scrutiny from individual procedural shortcomings to risks and outcomes. It would affect whether a bank is formally cited for a single lapse and aligns with efforts to modernize the framework under the Anti-Money Laundering Act of 2020.

The Federal Reserve Board approved the proposal by a 6–1 vote on July 7, 2026. It calls for enforcement or significant supervisory action only in cases involving “significant or systemic” deficiencies and does not set separate monetary penalties. The rule was published in the Federal Register on July 9, with public comments due by September 8, and follows a proposal issued by FinCEN, the OCC, the FDIC and the NCUA on April 10.

U.S. banks and FinTechs share APIs, customer identities and transaction data, but fragmented information can undermine the detection of suspicious transactions. The FDIC, OCC and NCUA are therefore requiring regulated institutions to allocate resources according to their actual risks and bring business partners into an ongoing AML compliance framework.

The latest draft was jointly proposed by the three agencies. It focuses on embedding APIs, identity data and transaction transparency into banks' compliance processes while keeping risk assessments up to date. Available information on the proposal does not disclose its publication date, effective date, applicable thresholds or monetary amounts. The final rule and implementation timetable remain pending.