FinCEN Proposes Regulatory Simplification

In a news release, the Financial Crimes Enforcement Network (FinCEN) announced the publication of a proposal to simplify its rules and regulations by centralizing them in its own new chapter of the Code of Federal Regulations.

The current organizational structure of FinCEN regulations developed over many years, during which Congress expanded FinCEN’s authority . As a result, the regulations are somewhat difficult to navigate. FinCEN’s regulations are currently included in the CFR as Part 103 in Chapter I under “Title 31, Money and Finance: Treasury.” FinCEN is proposing to reorganize and renumber its regulations into a new tenth chapter of Title 31 which would appear as “Title 31 Chapter X – Financial Crimes Enforcement Network.”

The proposal includes two structural changes to the organization of the BSA regulations. FinCEN regulations would be reorganized into a “General Provisions” part and then separate parts for each type of financial institution that has a BSA obligation. Therefore, under this simplified proposal, a compliance official for a Money Services Business, for example, would need only to look under “General Provisions” and then under “Rules for Money Services Businesses” to find pertinent FinCEN regulations. Additionally, FinCEN is proposing a numbering logic to its regulations. By having a uniform numbering system, specific FinCEN regulations will be easier to identify. For example, regulatory requirements for reports of suspicious transactions are proposed to be reorganized as 1010.320. The citation .320 will be universal in the part for each type of financial institution as well. The requirement for reports of suspicious transactions for banks will be 1020.320, for casinos and card clubs will be 1021.320, brokers or dealers in securities 1023.320, etc.

The Notice of Proposed Rulemaking is on the FinCEN website.