The Financial Crimes Enforcement Network (FinCEN) has completed its reorganization of the regulations implementing the Bank Secrecy Act (BSA) as part of its ongoing effort to increase the efficiency and effectiveness of its administration of the BSA and ease the compliance burden on financial institutions subject to the BSA. The transfer and reorganization of the BSA regulations to Chapter X of Title 31 of the Code of Federal Regulations will not result in any substantive changes to the underlying regulations. Nevertheless, financial institutions will be required to implement changes to their BSA compliance programs, including policies, procedures, controls and training materials to conform to the new regulatory citations. The new chapter is divided into multiple Parts, including a General Part that pertains to any financial institution that is subject to the BSA and individual Parts for each type of financial institution subject to the BSA.
As of March 1, 2011, FinCEN forms and any newly published materials will contain citations to 31 C.F.R. Chapter X. However, FinCEN will continue to accept all forms that reference 31 C.F.R. Part 103 and all materials previously published by FinCEN will not be updated to reflect the new citations. In addition, any Final Rules that are implemented prior to March 1, 2011 will be published first in the 31 C.F.R. Part 103 format and then published as an amendment to 31 C.F.R. Chapter X. Third, the appendices currently found in 31 C.F.R. Part 103 will not be included in 31 C.F.R. Chapter X. Instead, the appendices will be available on FinCEN’s website (http://www.fincen.gov). As financial institutions become familiar with the transfer of FinCEN regulations to 31 C.F.R. Chapter X, FinCEN recommends that citations note the current citation as well as the relevant corresponding new citations in parentheses. For example, citations through February 28, 2011 would be cited as 31 C.F.R. Part 103 (future 31 C.F.R. Chapter X) and citations after March 1, 2011 would be cited as 31 C.F.R. Chapter X (formerly 31 C.F.R. Part 103). In an effort to aid in the process, FinCEN has published, on its website, a cross-reference guide that lists the citation changes for each regulation, as well as created a tool that automatically translates old and new citations.
The transfer of the FinCEN regulations will be beneficial for all financial institutions and individuals subject to the BSA. The organization of the new chapter provides each regulated financial institution or individual with a clear outline of the programs and obligations that apply to it. In addition, all of the Parts are organized in a consistent manner so that financial institutions and compliance professionals may easily reference and navigate through the regulations. This restructuring and the availability of other BSA forms and materials on the FinCEN website are aimed to lead to greater compliance with FinCEN regulations and the advancement of the BSA.
Financial institutions and their employees will have to adjust to the new citations, but the regulatory obligations that were in place prior to March 1, 2011 will continue to remain in effect even after the transfer. FinCEN’s objective in reorganizing its regulations is primarily to ease the compliance efforts of regulated financial institutions. We recommend that financial institutions move quickly to update documents, training programs and other materials or systems that are relied on for compliance to reflect the new citations. For your convenience, the FinCEN press release regarding the restructuring is available at http://www.fincen.gov/news_room/nr/pdf/20101012.pdf.