Agency Information Collection Activities; Submission for OMB Review; Comment Request; Customer Identification Program Regulatory Requirements for Certain Financial Institutions

<NOTICE> DEPARTMENT OF THE TREASURY <SUBJECT>Agency Information Collection Activities; Submission for OMB Review; Comment Request; Customer Identification Program Regulatory Requirements for Certain Financial Institutions</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Departmental Offices, U.S. Department of the Treasury. <HD SOURCE="HED">ACTION:</HD> Notice of information collection; request for comment. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Department of the Treasury will submit the following information collection requests to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. The public is invited to submit comments on these requests. </SUM> <DATES> <HD SOURCE="HED">DATES:</HD> Comments should be received on or before September 30, 2024 to be assured of consideration. </DATES> <HD SOURCE="HED">ADDRESSES:</HD> Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to <E T="03">www.reginfo.gov/public/do/PRAMain.</E> Find this particular information collection by selecting “Currently under 30-day Review—Open for Public Comments” or by using the search function. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Copies of the submissions may be obtained from Spencer W. Clark by emailing <E T="03">PRA@treasury.gov,</E> calling (202) 927-5331, or viewing the entire information collection request at <E T="03">www.reginfo.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Financial Crimes Enforcement Network (FinCEN)</HD> <E T="03">Title:</E> Customer Identification Program Regulatory Requirements for Certain Financial Institutions. <E T="03">OMB Control Numbers:</E> 1506-0022, 1506-0026, 1506-0033, 1506-0034. <E T="03">Type of Review:</E> Extension without change of a currently approved collection. <E T="03">Description:</E> The legislative framework generally referred to as the Bank Secrecy Act (BSA) consists of the Currency and Foreign Transactions Reporting Act of 1970, as amended by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act) and other legislation, including the Anti-Money Laundering Act of 2020 (AML Act). The BSA is codified at 12 U.S.C. 1829b, 1951-1960 and 31 U.S.C. 5311-5314, 5316-5336, including notes thereto, with implementing regulations at 31 CFR chapter X. The BSA authorizes the Secretary of the Treasury (Secretary) to, inter alia, require financial institutions to keep records and file reports that are determined to have a high degree of usefulness in criminal, tax, or regulatory matters, risk assessments or proceedings, or in the conduct of intelligence or counter-intelligence activities to protect against terrorism, and to implement anti-money laundering/countering the financing of terrorism (AML/CFT) programs and compliance procedures. The authority of the Secretary to administer the BSA has been delegated to the Director of FinCEN. Title 31 U.S.C. 5318(l) requires the Secretary to issue regulations prescribing minimum standards for customer identification programs (CIPs) for financial institutions. Regulations implementing section 5318(l) are as follows: (i) banks (31 CFR 1020.220); (ii) brokers-dealers (31 CFR 1023.220); (iii) mutual funds (31 CFR 1024.220); and (iv) futures commission merchants and introducing brokers in commodities (31 CFR 1026.220). Under the CIP regulations, the minimum requirements include: (1) implementation of a written customer identification program appropriate for the financial institution's size and type of business; (2) identity verification procedures; (3) recordkeeping; (4) comparison with government lists; and (5) customer notice. The CIP may also include procedures specifying when a financial institution may rely on another financial institution to perform any of the financial institution's CIP procedures, provided certain conditions are met. <E T="03">Form:</E> None. <E T="03">Affected Public:</E> Businesses or other for-profit institutions, and non-profit institutions. <E T="03">Estimated Number of Respondents:</E> 16,232 financial institutions. <E T="03">Frequency of Response:</E> On occasion. <E T="03">Estimated Recordkeeping Burden and Cost:</E> In Part 1 of this notice, FinCEN describes the distribution of the estimated number of covered financial institutions, by type, and the estimated number of new accounts opened per year, by type of covered financial institution. In addition, Part 1 describes the primary characteristics of covered financial institutions' CIP requirements. In Part 2, FinCEN describes calculations of the estimated annual PRA burden based on methodology that was updated in response to public comments received following the initial <E T="04">Federal Register</E> notice published on June 20, 2024 (89 FR 51940). <HD SOURCE="HD1">Part 1. Distribution of the Financial Institutions and New Accounts Covered by This Notice</HD> The distribution of financial institutions and new accounts opened annually that are covered by this notice, by type of financial institution, is as follows: <GPOTABLE COLS="3" OPTS="L2,i1" CDEF="s100,22,15"> <TTITLE>Table 1—Distribution of Financial Institutions and New Accounts Covered by This Notice, by Type of Financial Institution</TTITLE> <CHED H="1">Type of financial institution</CHED> <CHED H="1"> Number of financial institutions </CHED> <CHED H="1">Number of new accounts opened annually</CHED> <ROW> <ENT I="01">0022 Futures commission merchants and introducing brokers in commodities</ENT> <ENT>954</ENT> <ENT>557,000</ENT> </ROW> <ROW> <ENT I="01">0026 Banks</ENT> <ENT>10,400</ENT> <ENT>53,615,000</ENT> In connection with a variety of initiatives FinCEN is undertaking to implement the AML Act, FinCEN intends to conduct, in the future, additional assessments of the PRA burden associated with BSA requirements. <HD SOURCE="HD1">Part 2. Annual PRA Burden and Cost</HD> For all covered financial institutions, FinCEN continues estimating the incremental annual PRA recordkeeping burden associated with maintaining and updating the CIP (“maintenance”) at ten hours per financial institution. This estimate covers: (a) an average of approximately nine hours per financial institution per year associated with the burden of updating the records necessary to demonstrate compliance with CIP requirements to take into consideration any regulatory changes and any modifications required as a result of a financial institution making changes to the type of accounts maintained, the methods used to open accounts, and the types of documentary or nondocumentary methods for verifying identifying information the financial institution intends to use; and (b) an average of approximately one hour per financial institution associated with the burden of presenting the updated CIP to the appropriate level of management within the financial institution and obtaining approval. In addition, FinCEN continues estimating the incremental annual PRA recordkeeping burden associated with providing customers with notification of the CIP (“notification”) at one hour per financial institution. FinCEN has increased the estimate of the incremental annual PRA recordkeeping burden associated with obtaining and verifying a customer's identity ( <E T="03">i.e.,</E> verification and recordkeeping requirements, and consulting government lists) (“implementation”) to three minutes per new account opened. Under these assumptions, FinCEN's estimate of the annual incremental PRA burden is 5,094,652 hours, as detailed in tables 2 and 3. <GPOTABLE COLS="7" OPTS="L2,nj,p7,7/8,i1" CDEF="s50,12,11,12,12,11,7"> <TTITLE>Table 2—Incremental Annual Burden Associated With Updating and Maintaining the CIP and Customer Notification for All Covered Financial Institutions</TTITLE> <CHED H="1">Type of financial institution</CHED> <CHED H="1">Time per financial institution</CHED> <ENT I="01">0022 Futures commission merchants and introducing brokers in commodities</ENT> <ENT>954</ENT> <ENT>10</ENT> <ENT>1</ENT> <ENT>9,540</ENT> <ENT>954</ENT> <ENT>10,494</ENT> <GPOTABLE COLS="6" OPTS="L2,nj,p7,7/8,i1" CDEF="s50,12,12,11,11,12"> <TTITLE>Table 3—Incremental Annual Burden Associated With Implementing the Identity Verification, Recordkeeping, and Consulting Government Lists Requirements for All Covered Financial Institutions</TTITLE> <CHED H="1">Type of financial institution</CHED> <CHED H="1">New accounts opened per year</CHED> <CHED H="1"> Time per new account (minutes) </CHED> <CHED H="1">Total burden in minutes</CHED> <CHED H="1">Total burden converted to hours</CHED> <ROW> <ENT I="01">0022 Futures commission merchants and introducing brokers in commodities</ENT> <ENT>954</ENT> <ENT>557,000</ENT> <ENT>3</ENT> <ENT>1,671,000</ENT> <ENT>27,850</ENT> </ROW> <ROW> <ENT I="01">0026 Banks</ENT> <ENT>10,400</ENT> <ENT>53,615,000</ENT> FinCEN is utilizing the same fully loaded composite hourly wage rate of $106.30 utilized in other OMB control number renewals and notices of proposed rulemakings (NPRMs) recently opened to public review and comment. The total estimated cost of the annual PRA burden is $541,561,508, as reflected in table 4 below: <GPOTABLE COLS="4" OPTS="L2,nj,i1" CDEF="s50,12,12,12"> <TTITLE>Table 4—Total Cost of Annual PRA Burden</TTITLE> <CHED H="1">Task</CHED> <CHED H="1">Hours</CHED> <CHED H="1">Hourly cost</CHED> <CHED H="1">Total cost</CHED> <ROW> <ENT I="01">Maintaining and updating the CIP (10 hours per FI)</ENT> <ENT>162,320</ENT> <ENT>$106.30</ENT> <ENT>$17,254,616</ENT> </ROW> <ROW> <ENT I="01 ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 11k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━