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Proposed Regulations
Proposed New Parts 115 and 116 of the General Regulations of the Banking Board and
Proposed New Parts 416 and 417 of the Superintendent’s Regulations
(Anti-Money Laundering Programs for Applicants and Regulated Entities)


August 16, 2007

TO THE INDIVIDUAL OR INSTITUTION ADDRESSED:

RE: Proposed New Parts 115 and 116 of the General Regulations of the Banking Board and Proposed New Parts 416 and 417 of the Superintendent’s Regulations (Anti-Money Laundering Programs for Applicants and Regulated Entities)


The Banking Board has authorized the issuance for public comment of the attached proposed new Parts 115 and 116 of the General Regulations of the Banking Board and the Superintendent has authorized the issuance for public comment of proposed new Parts 416 and 417 of the Superintendent’s Regulations.

The proposed regulations would formalize the existing practice of the Department to require applicants for charters, licenses, acquisitions, changes of control and (in the case of licensed check cashers) branches, to guard against money laundering through their institutions, and to require banking organizations, foreign banking corporations, licensed check cashers and licensed money transmitters to establish and maintain anti-money laundering programs. 

In the period since September 11, 2001 federal and state regulators have moved to increase their scrutiny of regulated entities in the anti-money laundering (“AML”) context.  The AML requirements are intended to protect the financial system from abuse by criminal organizations and terrorist groups.

Currently, the Department requests information from applicants regarding their compliance with anti-money laundering requirements, but these requests are informal.  New York does not currently have formal application or compliance requirements in this area, although it does generally require applicants to demonstrate compliance with AML requirements and does examine for such compliance after chartering or licensing.   

The proposed regulations would convert these current practices into regulatory requirements. 

Proposed new Parts 115 and 116 of the Banking Board regulations would apply to applications involving, and compliance by, banking organizations and licensed foreign banking corporations. 

Specifically, proposed Part 115 would require applicants seeking to charter or license banks, trust companies, savings banks, savings and loan associations, private bankers, investment companies, safe deposit companies, credit unions and foreign bank branches or agencies to demonstrate their ability to comply with existing federal AML requirements.  Proposed Part 115 would also impose similar requirements on applications to acquire such entities.

Proposed Part 116 would require existing entities of these types to establish and maintain AML programs that comply with applicable federal requirements.

Proposed new Parts 416 and 417 of the Superintendent’s Regulations would apply similar requirements to applications involving, and compliance by, licensed check cashers and licensed money transmitters.

All institutions subject to these new rules are already subject to a federal AML requirement and will be able to demonstrate compliance with these new regulations by demonstrating that they meet the federal AML requirement to which they are subject.  Thus, any new burdens and costs will be nominal.  Entities not subject to federal AML requirements will not be affected by the proposed rules.

AML compliance is of vital importance to the public safety and the safety of the financial services industry.  The proposed regulations will increase the Department’s ability to review and enhance such compliance.

The Notice of Proposed Rule Making is expected to be published in the August 29, 2007 issue of the State Register.  Comments should be sent to Sam L. Abram, Secretary of the Banking Board, by October 13, 2007.

Very truly yours,

Sam L. Abram
Secretary of the Banking Board

Text of Part 115 of the General Regulations of the Banking Board
Text of Part 116 of the General Regulations of the Banking Board
Text of Part 416 of the Superintendent's Regulations
Text of Part 417 of the Superintendent's Regulations