FinCEN (with NASCUS’ help) to propose ‘no-action’ letters

(July 2, 2021) A “no-action letter” process – a form of regulatory enforcement discretion in which an agency states, in writing, that will not take an enforcement action against a party for particular actions – would be “a useful complement” to FinCEN’s toolbox, the agency said in a statement this week.

NASCUS was one of the organizations that provided information to the agency to help it reach that conclusion, FinCEN acknowledged in an accompanying report.

“FinCEN looks forward to continuing to engage with our government partners and the public during a future rulemaking process to ensure all constructive feedback is considered on this important issue,” said agency Acting Director Michael Mosier in a statement.

The agency said that, after conducting an assessment on the use of the no-action letters (which are employed by both the CFPB and, the report notes, the Idaho Department of Finance, among others), FinCEN concluded that it should plan a rulemaking to create a process for issuing no-action letters “in addition to its current forms of regulatory guidance and relief, with the timing subject to resource limitations and competing priorities.”

FinCEN was required to conduct the assessment by the 2020 Anti-Money Laundering (AML) Act. The result, the agency said, was that a rulemaking for a no-action letter process should be started. However, FinCEN added, it believes that a no-action letter process “would likely be most effective and workable if it is limited to FinCEN’s exercise of its own enforcement authority, as opposed to also addressing other regulators’ exercise of their distinct enforcement authorities.”

According to FinCEN, a “no-action letter” is a form of enforcement discretion in which an agency issues a letter indicating its intention not to take enforcement action against the submitting party for the specific conduct presented to the agency. Generally, FinCEN asserted, such letters address only prospective activity not yet undertaken by the submitting party.

In the report the agency issued, it noted that NASCUS (among others) “assisted in facilitating consultation with the various … state credit union supervisors” while FinCEN was making its assessment.  “All State Bank and State Credit Union Supervisors were notified of the Assessment and given an opportunity to consult individually with FinCEN,” the agency stated.

FinCEN Completes Assessment on the Use of No-Action Letters