FEDERAL GOVERNMENT RELATIONS
FinCEN, banking agencies propose to overhaul Bank Secrecy Act compliance
FinCEN and the banking agencies proposed new rules to “fundamentally reform” compliance with the Bank Secrecy Act by setting standards for what financial institutions should include in their anti-money laundering programs.
White House report downplays risk to banks from stablecoin interest payments
A prohibition on paying interest or yield on payment stablecoins would do “very little” to protect bank lending “while forgoing the consumer benefits of competitive returns on stablecoin holdings,” according to a new report by the White House Council of Economic Advisors.
FCC proposes stronger penalties on voice service providers for KYC failures
The Federal Communications Commission proposed to impose stronger “know your customer” requirements on voice service providers that originate calls, as part of an effort to crack down on illegal scam calls. The commission is scheduled to vote on whether to issue the draft proposal at its April 30 open meeting.
Agencies propose anti-money laundering, sanctions requirements for stablecoin issuers
The Financial Crimes Enforcement Network and Office of Foreign Asset Control jointly proposed a new rule to establish Bank Secrecy Act and sanctions compliance obligations for payment stablecoin issuers.
The joint proposal adds to a growing list of GENIUS Act rulemakings, with more on the way.
- The Federal Deposit Insurance Corp. this week released a proposed rule to establish a prudential framework for FDIC-supervised payment stablecoins issuers under the GENIUS Act.
- The Office of the Comptroller of the Currency issued a GENIUS Act implementation proposal in late February and is accepting public comments through May 1.
- In a separate Treasury Department proposed rule to implement GENIUS Act policies on state-level regulatory regimes, Treasury said the OCC’s rule will serve as a key component of the federal regulatory framework.
- The FDIC in December proposed a rule to establish GENIUS Act procedures for the agency to accept and process payment stablecoin issuer applications from FDIC-supervised banks, with comments due May 18 following an extension.
FDIC, OCC finalize rule barring agency use of reputation risk
The Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency jointly issued a final rule that codifies the elimination of reputation risk from their supervisory programs.
The final rule prohibits the agencies from:
- Criticizing or taking adverse action against an institution on the basis of reputation risk.
- Requiring, instructing, or encouraging an institution to close customer accounts or take other actions on the basis of a person or entity’s political, social, cultural, or religious views or beliefs, constitutionally protected speech, or solely on the basis of politically disfavored but lawful business activities perceived to present reputation risk.
The Federal Reserve in February requested comments on a separate proposal to codify the removal of reputation risk from its supervision of banks.
States tighten reins on ‘crypto ATMs’
In recent months, multiple states have proposed and passed laws to tighten restrictions on convertible virtual currency kiosks, with Indiana becoming the first state to ban the machines.