ABA seeks equal treatment for all institutions under proposed stablecoin BSA, sanctions rule

The American Bankers Association said today that it supports the Office of the Comptroller of the Currency’s proposed approach to treat stablecoin issuers as financial institutions for Bank Secrecy Act and sanctions compliance, but believes additional changes are needed to treat all regulated entities equally.

The Genius Act directs federal banking agencies to enforce regulations for stablecoin issuers. The OCC’s proposed rule would require agency-regulated issuers to maintain effective anti-money laundering and terrorist financing and sanctions compliance programs, consistent with rules proposed earlier this year by the Financial Crimes Enforcement Network and the Office of Foreign Assets Control.

In a letterThe ABA said the agency is taking a “reasonable approach to burden reduction and regulatory consistency” in its proposed rulemaking. However, the association noted that it recommended FinCEN and OFAC make changes to their proposal, including adopting an examination framework under which all categories of stablecoin issuers are examined for anti-money laundering/countering the financing of terrorism and sanctions compliance by the same federal banking agencies.

In addition, the ABA said:

• FinCEN should apply the logic of “assessed compliance” to stablecoin issuer subsidiaries of insured depository institutions, allowing them to rely on their parent bank’s enterprise-wide AML/CFT program.
• The final rule should confirm that it imposes obligations solely on issuers and does not extend to reserve custodian banks or other financial institutions that provide services to those issuers.
• FinCEN and OFAC should define key terms—including “block,” “freeze,” “burn,” “discard,” “seize,” and “account”—to provide legal certainty in compliance and enforcement.

The ABA also noted that the OCC’s proposal seeks answers to several questions that go beyond the scope of the rule. He requested an extension of the 30-day comment period to provide adequate feedback on the issues and to raise the topics for processing in a separate rulemaking.