In the United States, anti-money laundering (AML) compliance is built largely around the Bank Secrecy Act (BSA) and its implementing regulations. Covered institutions use controls to understand customer relationships, monitor activity, keep required records, investigate concerns, and file reports when applicable. The exact duties depend on the institution, its regulator, its products, and the risks it faces—not every financial company follows one identical checklist.
What U.S. AML rules are built on
The Currency and Foreign Transactions Reporting Act of 1970, its amendments, and related statutes are commonly known as the Bank Secrecy Act. The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) administers important parts of the framework. The BSA authorizes reporting and other requirements intended to help detect and prevent money laundering; its requirements also support detection of activity that may indicate tax evasion or other crime. It is often referred to as BSA/AML. FinCEN’s Bank Secrecy Act overview describes key recordkeeping and reporting duties.
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The Anti-Money Laundering Act of 2020 amended the framework and directed modernization work. FinCEN lists AML/CFT priorities, program requirements, and subsequent developments on its AML Act of 2020 page. A proposed rule or announced modernization effort is not automatically a binding requirement; its status matters.
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How an AML program works in practice
An AML program is a continuing process, not a single identity check at account opening. An institution identifies a customer, learns enough about the expected relationship to assess relevant risk, applies controls suited to that risk, reviews activity over time, investigates concerns, documents its work, and files reports when applicable rules require it.
The five minimum components for covered CDD programs
For institutions subject to the Customer Due Diligence (CDD) program requirements, FinCEN identifies five minimum components. These are often described as the five pillars of a BSA/AML program:
- Internal controls: Policies, procedures, and processes that address the institution’s BSA/AML risks and applicable duties.
- Independent testing: Testing that assesses whether the program is working as intended.
- Accountable leadership: A designated compliance officer or responsible individual.
- Training: Training for personnel whose work requires it.
- Ongoing CDD: Risk-based procedures to understand customer relationships, develop risk profiles, monitor activity, identify and report suspicious transactions, and maintain or update customer information as appropriate.
These components are not a universal checklist for every financial business. FinCEN’s CDD rule applies to specified banks, mutual funds, securities broker-dealers, futures commission merchants, and introducing brokers in commodities; other sectors may have distinct requirements and supervisory guidance. The institution’s charter, regulator, products, customers, and applicable rules shape its program.
How risk changes the controls
A risk-based approach means controls should be commensurate with the institution’s BSA/AML risk. Customer, product, geographic, and channel risks can all matter. Higher risk can call for heightened due diligence, while lower risk does not mean no controls. A high-risk rating is not, by itself, an automatic rejection rule; the institution’s assessment and applicable requirements determine the appropriate response. FinCEN’s CDD guidance describes this risk-based approach.
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CDD goes beyond collecting an identity document. It includes customer identification, identifying beneficial owners for covered legal-entity customers, understanding the nature and purpose of a relationship, and ongoing monitoring. The objective is to build a risk profile that helps the institution recognize activity that may not fit what it knows about the customer.
Beneficial owners and the 2026 account-opening relief
Under the CDD rule, covered institutions generally identify and verify natural persons who own, control, and profit from a legal-entity customer, subject to exemptions and the rule’s scope. The rule’s basic ownership threshold is 25 percent. FinCEN’s FAQ material, updated May 6, 2026, says an institution may collect information at a lower ownership percentage when its risk assessment warrants it; the control prong is separate.
On February 13, 2026, FinCEN granted covered institutions optional exceptive relief from identifying and verifying beneficial owners at every new account opening. An institution that elects to use the relief may generally do so at a customer’s first account opening, when facts call the reliability of previously obtained information into question, and as needed under risk-based ongoing CDD. Institutions may instead retain their existing every-account-opening process. The relief changes the timing in specified circumstances; it does not abolish beneficial-owner identification.
Institutional CDD is not the same as CTA reporting
Customer due diligence by a financial institution is separate from beneficial ownership information (BOI) reporting by entities under the Corporate Transparency Act. FinCEN’s BOI page, updated August 11, 2026, says U.S. companies are exempt from BOI reporting requirements and U.S. persons are no longer required to report under the revised rule. That change concerns entity reporting to FinCEN; it does not itself remove a financial institution’s separate CDD duties.
CTR and SAR: two different reports
A Currency Transaction Report (CTR) and a Suspicious Activity Report (SAR) serve different purposes. A CTR is tied to qualifying cash transactions; a SAR concerns activity that meets applicable suspicious-activity reporting requirements. One report type does not substitute for the other.
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| Report | What prompts it | What it does not mean |
|---|---|---|
| CTR | FinCEN’s BSA overview states that covered cash transactions exceeding $10,000 in daily aggregate meet the stated reporting threshold. | The threshold is not a test for whether activity is suspicious, and it does not decide whether a SAR is needed. |
| SAR | Suspicious activity under the requirements applicable to the institution. Concerns can include suspected money laundering, structuring, or other criminal conduct. | There is no single activity pattern in this overview that automatically resolves every filing decision; applicable rules and institutional procedures govern. |
Structuring—breaking up transactions to evade reporting requirements—can be a reason for suspicion, but a CTR threshold alone does not determine the SAR decision. FinCEN’s October 9, 2025 SAR FAQs address structuring-related filings, continuing-activity reviews, and decisions not to file. SAR confidentiality rules also apply: an institution must not reveal a SAR’s existence to the subject where those rules prohibit disclosure.
When institutions share information
Section 314(b) of the USA PATRIOT Act provides a safe harbor for qualifying financial institutions and associations that share information for identifying and, where appropriate, reporting possible money laundering or terrorist activity. FinCEN’s current 314(b) page points to a June 12, 2026 fact sheet and marks older material as rescinded. The safe harbor has conditions; it is not blanket permission to disclose any customer information.
What has changed—and what has not
As of October 9, 2026, two beneficial-ownership developments require particular care: FinCEN’s optional relief changes when covered institutions may identify beneficial owners at account opening, and the revised BOI reporting rule changes which entities and people have reporting duties. Neither development, on its own, ends the separate BSA/AML or CDD obligations that apply to covered financial institutions. Because these rules and guidance have changed repeatedly, institutions should check the current FinCEN materials and applicable rule text for their own circumstances.
How to assess AML duties for a particular institution
A useful first step is to identify the institution’s legal category and regulator, then map the products, customers, geographies, and channels that shape its risk. From there, determine which program, CDD, recordkeeping, monitoring, and reporting requirements apply; establish controls and training that address them; and test whether the controls work. A general federal overview cannot resolve obligations tied to a particular charter, regulator, state, product, or customer relationship.
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