DCUC Writes To NCUA and FinCEN In Support Of Risk-Based AMLCFT Modernization
By CU Today Staff —
WASHINGTON--The Defense Credit Union Council has submitted formal comments to the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and the NCUA in response to a proposed rule implementing provisions of the Anti-Money Laundering Act of 2020 (AML Act) and modernizing AML/CFT program requirements.
The proposal was developed in coordination with the Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), and FinCEN.
“DCUC generally supports the proposal’s transition toward risk-based, effective AML/CFT programs. We believe the proposal appropriately emphasizes risk-based supervision, program effectiveness, and institution-specific risk management. As the agencies finalize the rule, we encourage NCUA to preserve flexibility for credit unions, promote consistent examination practices, and avoid unnecessary compliance burdens that do not enhance the effectiveness of AML/CFT programs,” wrote Jason Stverak, DCUC chief advocacy officer.
In its letter, DCUC strongly supported the proposal’s emphasis on tailoring AML/CFT programs to the size, complexity, and risk profile of individual institutions. Stverak noted that credit unions should not be held to one-size-fits-all standards that may not reflect their operational realities.
Stverak recommended that regulatory expectations should remain flexible, allowing institutions to apply appropriate methodologies for risk assessment, documentation, and ongoing program maintenance without unnecessary administrative burden.
DCUC’s letter also noted the importance of consistent examiner training and implementation across regions to ensure the effectiveness of a risk-based framework. Stverak encouraged enhanced guidance and training to examiners to ensure alignment in supervisory expectations and application.
“A risk-focused examination framework allows supervisory resources to be directed toward the most significant concerns while reducing unnecessary burden on smaller institutions that maintain effective compliance programs. Consistency in examiner expectations and adequate training will be essential to the successful implementation of this rule,” said Stverak. “It’s important to recognize the unique operational environment of credit unions serving military communities, including deployed servicemembers and highly mobile families, when applying supervisory standards.
DCUC expressed support for the proposal’s recognition of innovative technologies that can strengthen AML/CFT compliance efforts, while cautioning against expectations that institutions adopt specific tools or systems regardless of size or capacity.
“We encourage regulators to allow sufficient time for implementation, and recommend an 18–24 month compliance period following publication of the final rule, along with continued industry engagement, training webinars, and coordinated guidance across federal regulators,” added Stverak.
DCUC Responds to FinCEN and OFAC Proposed Stablecoin Rule Under GENIUS Act
DCUC also submitted a comment letter to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) following FinCEN regarding its joint proposed rule with the Office of Foreign Assets Control (OFAC) implementing provisions of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act).
The proposed rule would treat permitted payment stablecoin issuers (PPSIs) as financial institutions under the Bank Secrecy Act (BSA), establish anti-money laundering obligations, impose specific statutory requirements for PPSIs, and require effective sanctions compliance programs.
“DCUC supports Treasury’s efforts to combat illicit finance and implement the GENIUS Act in a manner that promotes financial integrity and responsible innovation. As this framework is developed, it is critical that implementation remains workable for credit unions and does not unintentionally limit their ability to participate in emerging payment systems,” said Stverak.
DCUC urged FinCEN and OFAC to ensure that requirements remain proportionate to an institution’s size, complexity, risk profile, and level of engagement in stablecoin activities. DCUC also stressed that credit unions engaging in limited stablecoin-related activities should not be subject to the same supervisory expectations as large-scale issuers, and that examination standards must reflect actual risk exposure.
“We strongly support the agencies’ continued emphasis on risk-based compliance frameworks, as credit unions have long relied on risk-based approaches to allocate resources toward higher-risk products, services, and transactions,” added Stverak.
DCUC said it supports applying risk-based principles to sanctions compliance obligations, ensuring institutions can tailor programs appropriately rather than adopting one-size-fits-all requirements. The recommendations called for avoiding duplicative regulatory requirements, as many credit unions already maintain robust BSA, customer due diligence, suspicious activity reporting, and sanctions compliance programs.
“We encourage FinCEN and OFAC to provide advance guidance, training materials, and industry webinars prior to examinations, along with continued interagency coordination to support consistent implementation in this emerging regulatory space,” Stverak said.
Originally reported by CU Today.