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BOARD OF GOVERNORS OF THE

FEDERAL RESERVE SYSTEM

WASHINGTON, D.C. 20551

DIVISION OF SUPERVISION

AND REGULATION

SR 20-19

August 13, 2020

TO THE OFFICER IN CHARGE OF SUPERVISION

 AT EACH FEDERAL RESERVE BANK

SUBJECT: Joint Statement on Enforcement of Bank Secrecy Act/Anti-Money Laundering 

Requirements

Applicability: This guidance applies to all financial institutions supervised by the Federal 

Reserve that are subject to the Bank Secrecy Act.

The purpose of this letter is to announce that the general counsels of the Federal Reserve, 

the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the 

Office of the Comptroller of the Currency (collectively, the Agencies) issued a joint statement 

that updates and supersedes the Interagency Statement on Enforcement of Bank Secrecy 

Act/anti-money laundering (BSA/AML) Requirements issued on July 19, 2007, to further 

promote a consistent approach to the application of section 8(s) of the Federal Deposit Insurance 

Act (FDIA) and section 206(q) of the Federal Credit Union Act (FCUA). 1

 

This statement expressly does not create new supervisory expectations or standards. 

Rather, it is intended to further clarify the Agencies’ enforcement of the BSA and the conditions 

that require the issuance of a mandatory cease and desist order under sections 8(s) and 206(q). 

Whenever the Agencies undertake an enforcement action, whether mandatory under sections 

8(s)(3) and 206(q)(3) or otherwise, they will tailor that action to address the deficiencies that are

specific to the institution,2 as identified during the supervisory process.3

Sections 8(s) and 206(q) generally require each federal banking agency to issue an order 

to cease and desist when a supervised institution fails to comply with certain BSA/AML 

requirements4 — in particular, the requirement for an institution to establish and maintain a

 1 12 U.S.C. §§ 1786(q), 1818(s).

2 The term “institution” refers to banks, as defined in 31 C.F.R. § 1010.100(d), and includes each agent, agency, 

branch or office within the United States of banks, savings associations, credit unions, and foreign banks.

3 It should also be noted that BSA/AML enforcement actions can have a significant impact on an institution’s 

ability to engage in certain corporate activities and expansion since the effectiveness of an institution’s efforts in 

combating money laundering are expressly required to be considered by the Agencies when evaluating proposals 

subject to the Bank Merger Act, 12 U.S.C. § 1828(c)(11), and the Bank Holding Company Act, 12 U.S.C. § 

1842(c)(6).

4 This statement does not address the assessment of civil money penalties for violations of the BSA or its 

implementing regulations. The Agencies have such authority under their general enforcement statutes. 12 U.S.C. 

§§ 1786(k)(2) and 1818(i)(2). Likewise, the Financial Crimes Enforcement Network (“FinCEN”) has independent 

authority to assess civil money penalties under the BSA. 
 

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BSA/AML compliance program with four components or pillars (internal controls, independent 

testing, responsible individual, and employee training). 

The updated statement provides some additional examples of when a cease and desist 

order may be issued under the FDIA and addresses how the agencies:

(1) Incorporate the customer due diligence regulations and recordkeeping requirements 

issued by the U.S. Department of the Treasury, as part of the internal controls pillar of the 

supervised institution’s BSA/AML compliance program;

(2) Evaluate individual component or pillar violations that do not rise to the level of a 

BSA/AML compliance program failure and are outside of the scope of sections 8(s) and 

206(q); and

(3) Evaluate less serious issues or isolated or technical violations or deficiencies as generally 

outside of the scope of sections 8(s) and 206(q). 

This statement also describes the circumstances in which an Agency may use its 

discretion to issue formal or informal enforcement actions or use other supervisory actions to 

address BSA-related violations, unsafe or unsound banking practices, or other deficiencies. 

Federal Reserve Banks are asked to distribute this letter to the supervised institutions in 

their districts and to appropriate supervisory staff. In addition, supervised organizations may 

send questions via the Board’s public website.5

Michael S. Gibson

Director

Attachment:

• Joint Statement on Enforcement of Bank Secrecy Act/Anti-Money Laundering 

Requirements

Supersedes:

• SR 07-10, “Interagency Statement on Enforcement of BSA/AML Requirements”

 5 See, http://www.federalreserve.gov/apps/contactus/feedback.aspx