Cross-regulator no-action process would provide oversight, consistency

CUNA strongly supports the Financial Crimes Enforcement Network’s (FinCEN) effort to establish a no-action letter process, it wrote to FinCEN Friday. No-action letters come from government agencies stating it will not take legal action should an entity proceed with a proposed course of action.

The Anti-Money Laundering (AML) Act of 2020 required FinCEN to study whether a no-action letter process should be established, and the June 2021 FinCEN report concluded the agency should pursue a process for issuing no-action letters to supplement current forms of guidance.

“In particular, CUNA applauds FinCEN’s pursuit of a cross-regulator no-action letter process which will likely provide both important guidance and consistency with regard to examinations and oversight expectations,” the letter reads.

“Further, CUNA supports any mechanism for improving transparency and feedback from FinCEN regarding the AML/CFT regime. Credit unions could more effectively implement compliance programs if they have a better understanding of FinCEN’s expectations and analysis,” it adds. “Greater transparency and communication between the regulatory agencies, law enforcement, and the industry will ensure all stakeholders have consistent goals and improve the value of the information collected and reported.”

CUNA also recommended FinCEN enter into a memorandum of understanding with other regulators, particularly those with AML/CFT examination and oversight obligations, regarding the weight and significance of FinCEN no-action letters.

“By establishing clear expectations regarding the purpose and significance of these letters, FinCEN can ensure that they are used consistently across all agencies,” the letter reads. “Further, this MOU would clearly indicate the significance and reliability of these no-action letters for examined institutions so that they are clear on the limits of these letters during their examinations.”

CUNA noted the no-action letter process should include FinCEN:

• Providing publicly available clarity regarding the circumstances under which it would release a no-action letter and clearly indicate the timeframes in which it will review and respond to requests.
• Prohibit no-action letters from being requested in connections with an examination process.
• Ask requesters of a no-action letter whether they wish to keep their information confidential or not
• Publish no-action letters and make them available in a way that makes research easy and fast. Responses should also be easily searchable online.