Major changes are underway in the United States’ approach to anti-money laundering as federal regulators move to overhaul the Bank Secrecy Act. The proposed reforms would allow banks to shift their focus away from low-risk customers and transactions, enabling them to concentrate more heavily on serious threats such as money laundering, sanctions evasion, terrorist financing, and cyber-enabled financial crime.
The U.S. Treasury Department and Financial Crimes Enforcement Network (FinCEN) are leading the charge in redefining AML compliance expectations. At the heart of the proposal is a move toward more flexible, risk-based allocation of resources, allowing institutions to tailor their programs based on the relative threat level posed by different client types and transaction categories.
A central feature of the proposed framework is the formal addition of risk assessment as a core requirement under the BSA. Financial institutions would be expected to conduct dynamic and ongoing risk evaluations that evolve with their operations and emerging external threats. This sixth “pillar” joins existing elements of AML programs: internal controls, compliance oversight, training, and independent auditing.
These reforms come in response to long-standing calls to modernize AML enforcement. Since the 2020 passage of the Anti-Money Laundering Act, regulators have emphasized the need to make compliance programs more effective and efficient. The current proposal aims to ensure that institutions not only meet regulatory requirements on paper but also contribute meaningfully to national security objectives by targeting their efforts where they matter most.
The shift also acknowledges the need for proportionality. Regulators are working to tailor compliance obligations for smaller institutions like community banks, which often struggle under the weight of one-size-fits-all rules. These banks may be exempted from certain internal control expectations, easing operational pressure while still maintaining core AML safeguards.
Industry reaction has been largely positive. The American Bankers Association and other trade groups have voiced support for the changes, saying that they will allow financial institutions to reallocate time and resources toward fighting real financial threats such as human trafficking, drug trade financing, and complex international fraud.
The next step will be the formal release of a Notice of Proposed Rulemaking (NPRM), which will outline the new requirements and open the floor for public comment. Once finalized, institutions will be given a transition period to revise their policies, train personnel, and update monitoring systems.
These proposed updates represent a strategic shift in how banks approach AML compliance—from broadly applied monitoring toward targeted, intelligence-led oversight. As financial threats grow more complex and globalized, regulators hope this focused strategy will deliver stronger, more measurable outcomes without placing unnecessary burdens on lower-risk activity.
