[Federal Register Volume 85, Number 157 (Thursday, August 13, 2020)]
[Notices]
[Pages 49425-49431]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17694]


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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network


Agency Information Collection Activities; Proposed Renewal; 
Comment Request; Renewal Without Change of the Customer Identification 
Program Regulatory Requirements for Certain Financial Institutions

AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury.

ACTION: Notice and request for comments.

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SUMMARY: As part of its continuing effort to reduce paperwork and 
respondent burden, FinCEN invites comments on the proposed renewal, 
without change, of currently approved information collections found in 
existing Bank Secrecy Act regulations requiring banks, savings 
associations, credit unions, certain non-federally regulated banks, 
brokers or dealers in securities, mutual funds, futures commission 
merchants, and introducing brokers in commodities, to develop and 
implement customer identification programs designed to allow the 
financial institution to form a reasonable belief it knows the true 
identity of each customer. Although no changes are proposed to the 
information collections themselves, this request covers a future 
expansion of the scope of the annual burden and cost estimates 
associated with these regulations. This request for comments is made 
pursuant to the Paperwork Reduction Act of 1995.

DATES: Written comments are welcome, and must be received on or before 
October 13, 2020.

ADDRESSES: Comments may be submitted by any of the following methods:
     Federal E-rulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments. Refer to Docket Number 
FINCEN-2020-0010 and the specific Office of Management and Budget (OMB) 
control numbers 1506-0022, 1506-0026, 1506-0033, and 1506-0034.
     Mail: Policy Division, Financial Crimes Enforcement 
Network, P.O. Box 39, Vienna, VA 22183. Refer to Docket Number FINCEN-
2020-0010 and OMB control numbers 1506-0022, 1506-0026, 1506-0033, and 
1506-0034.
    Please submit comments by one method only. Comments will also be 
incorporated into FinCEN's review of existing regulations, as provided 
by Treasury's 2011 Plan for Retrospective Analysis of Existing Rules. 
All comments submitted in response to this notice will become a matter 
of public record. Therefore, you should submit only information that 
you wish to make publicly available.

FOR FURTHER INFORMATION CONTACT: The FinCEN Regulatory Support Section 
at 1-800-767-2825 or electronically at [email protected].

SUPPLEMENTARY INFORMATION:

I. Statutory and Regulatory Provisions

    The legislative framework generally referred to as the Bank Secrecy 
Act (BSA) consists of the Currency and Financial 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) (Pub. L. 107-56) and other 
legislation. The BSA is codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-
1959, 31 U.S.C. 5311-5314 and 5316-5332, and notes thereto, with 
implementing regulations at 31 CFR Chapter X.
    The BSA authorizes the Secretary of the Treasury, inter alia, to 
require financial institutions to keep records and file reports that 
are determined to have a high degree of usefulness in criminal, tax, 
and regulatory matters, or in the conduct of intelligence or counter-
intelligence activities, to protect against international terrorism, 
and to implement anti-money laundering (AML) programs and compliance 
procedures.\1\ Regulations implementing Title II of the BSA appear at 
31 CFR Chapter X. The authority of the Secretary to administer the BSA 
has been delegated to the Director of FinCEN.\2\
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    \1\ Section 358 of the USA PATRIOT Act added language expanding 
the scope of the BSA to intelligence or counter-intelligence 
activities to protect against international terrorism.
    \2\ Treasury Order 180-01 (re-affirmed Jan. 14, 2020).
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    31 U.S.C. 5318(l) requires FinCEN to issue regulations prescribing 
minimum standards for customer identification programs (CIP) for 
financial institutions.\3\ Regulations implementing section 5318(l) are 
as follows: (i) Banks, savings associations, credit unions, and certain 
non-federally regulated banks (31 CFR 1020.220); (ii) brokers or 
dealers in securities (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).
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    \3\ Section 5318(l)(2) prescribes that the regulations, at a 
minimum, require financial institutions to implement reasonable 
procedures for: (1) Verifying the identity of any person seeking to 
open an account, to the extent reasonable and practicable; (2) 
maintaining records of the information used to verify the person's 
identity, including name, address, and other identifying 
information; and (3) determining whether the person appears on any 
lists of known or suspected terrorists or terrorist organizations 
provided to the financial institution by any government agency. 
Section 5318(l)(3) further directed that the regulations take into 
consideration the types of accounts maintained by financial 
institutions, the methods of opening accounts, and the types of 
identifying information available.
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II. Paperwork Reduction Act of 1995 (PRA) \4\
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    \4\ Public Law 104-13, 44 U.S.C. 3506(c)(2)(A).
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    Title: Customer identification programs (CIP) for certain financial 
institutions (31 CFR 1020.220, 1023.220, 1024.220, and 1026.220).
    OMB Control Numbers: 1506-0022, 1506-0026, 1506-0033, and 1506-
0034.\5\
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    \5\ The CIP regulatory requirements are currently covered under 
the following OMB control numbers: 1506-0022 (31 CFR 1026.220--
Customer identification programs for futures commission merchants 
and introducing brokers); 1506-0026 (31 CFR 1020.220--Customer 
identification programs for banks, savings associations, credit 
unions, and certain non-federally regulated banks); 1506-0033 (31 
CFR 1024.220--Customer identification programs for mutual funds); 
and 1506-0034 (31 CFR 1023.220--Customer identification programs for 
brokers or dealers in securities).
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    Report Number: Not applicable.
    Abstract: FinCEN is issuing this notice to renew the OMB control 
numbers for the CIP regulatory requirements for certain financial 
institutions.
    Affected Public: Businesses or other for-profit institutions, and 
non-profit institutions.
    Type of Review:
     Renewal without change of currently approved information 
collections.
     Propose for review and comment a renewal of the portion of 
the PRA

[[Page 49426]]

burden that has been subject to notice and comment in the past (the 
``traditional annual PRA burden'').
     Propose for review and comment a future expansion of the 
scope of the PRA burden (the ``supplemental annual PRA burden'').
    Frequency: As required.
    Estimated Number of Respondents: 16,938 financial institutions.\6\
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    \6\ Table 1 below sets forth a breakdown of the types of 
financial institutions covered by this notice.
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    Estimated Recordkeeping Burden:
    In Part 1 of this notice, FinCEN describes the breakdown of the 
estimated number of financial institutions, by type, and for certain 
financial institutions, the estimated number of new accounts opened per 
year. In addition, Part 1 describes the primary characteristics of 
covered financial institutions' CIP requirements.\7\ In Part 2, FinCEN 
proposes for review and comment a renewal of the estimate of the 
traditional annual PRA hourly burden, which includes a scope and 
methodology similar to that used in the past, with the incorporation of 
cost estimates. The scope and methodology used in the past differed 
according to the type of covered financial institution. In Part 3, 
FinCEN proposes for review and comment a methodology to estimate the 
hourly burden and cost of a future estimate of a supplemental annual 
PRA burden that includes the full scope of CIP requirements for all 
covered financial institutions. Finally, in Part 4, FinCEN solicits 
input from the public about: (a) The accuracy of the estimate of the 
traditional annual PRA burden; (b) the method proposed for the 
calculation of a future supplemental annual PRA burden; (c) the 
criteria, metrics, and most appropriate questions FinCEN should 
consider when researching the information to estimate the future 
supplemental annual PRA burden, according to the methodology proposed; 
and (d) any other comments about the regulations and the proposed 
current and future hourly burden and cost estimates of these 
requirements.
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    \7\ The term ``covered financial institution'' applies to all 
financial institutions with a CIP regulatory requirement namely 
banks, savings associations, credit unions, certain non-federally 
regulated banks, brokers or dealers in securities, mutual funds, 
futures commission merchants, and introducing brokers in 
commodities.
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Part 1. Breakdown of the Financial Institutions and Transactions 
Covered by This Notice

    The breakdown of financial institutions and transactions, by type, 
covered by this notice is reflected in Table 1 below:

  Table 1--Breakdown of Financial Institutions and Transactions Covered by This Notice, by Type of Institution
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                                                            Estimated number of annual responses
                                          ----------------------------------------------------------------------
      Type of financial institution          Number of financial
                                                 institutions               Number of new accounts opened
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Banks....................................               \8\ 10,542  Information not available.
Brokers or dealers in securities.........                \9\ 3,640  9,000,000.\10\
Futures commission merchants.............                  \11\ 61  Information not available.
Introducing brokers in commodities.......               \12\ 1,104  Information not available.
Mutual funds.............................               \13\ 1,591  20,000,000.\14\
                                          ----------------------------------------------------------------------
    Totals...............................                   16,938  29,000,000.
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    All covered financial institutions are required to implement CIPs 
appropriate for their size and type of business. The CIP must include 
at minimum the following five requirements:
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    \8\ According to the Federal Deposit Insurance Corporation 
(FDIC) there were 5,103 FDIC-insured banks as of March 31, 2020. 
According to the Federal Reserve Board (FRB), there were 203 other 
entities supervised by the FRB, as of June 16, 2020, that fall 
within the definition of bank. (20 Edge Act institutions, 15 
agreement corporations, and 168 foreign banking organizations). 
According to the National Credit Union Administration there were 
5,236 federally regulated credit unions as of December 31, 2019.
    \9\ According to the Securities and Exchange Commission (SEC), 
there were 3,640 brokers or dealers in securities registered with 
the SEC, as of March 31, 2020.
    \10\ According to the SEC, there were approximately 9,000,000 
new accounts opened by broker or dealers in securities in 2017, 
based on forms filed with the SEC. The SEC provided this estimate to 
FinCEN for the last renewal of OMB control number 1506-0034 (83 FR 
46012, Sept. 11, 2018). FinCEN was unable to obtain a more recent 
estimate.
    \11\ According to the Commodities and Futures Trading Commission 
(CFTC), there were 61 futures commission merchants registered with 
the CFTC, as of March 31, 2020.
    \12\ According to the CFTC, there were 1,104 introducing brokers 
in commodities registered with the CFTC as of March 31, 2020.
    \13\ According to the SEC, there were approximately 1,591 mutual 
funds in 2017, based on forms filed with the SEC. The SEC provided 
the estimate to FinCEN for the last renewal of OMB control number 
1506-0033, 83 FR 46012 (Sept. 11, 2018). FinCEN was unable to obtain 
a more recent estimate.
    \14\ According to the SEC, there were approximately 20,000,000 
new mutual fund accounts opened in 2017. The SEC provided this 
estimate to FinCEN for the last renewal of OMB control number 1506-
0033, 83 FR 46012 (Sept. 11, 2018). FinCEN was unable to obtain a 
more recent estimate.
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    (1) Written CIP (if a financial institution is required to have an 
AML program,\15\ the CIP must be part of the written AML program); \16\
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    \15\ 31 CFR 1020.210; 1023.210; 1024.210; and 1026.210.
    \16\ 31 CFR 1020.220(a)(1); 1023.220(a)(1); 1024.220(a)(1); and 
1026.220(a)(1).
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    (2) Identity verification procedures (risk-based procedures for 
verifying the identity of each customer to the extent reasonable and 
practicable); \17\
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    \17\ 31 CFR 1020.220(a)(2); 1023.220(a)(2); 1024.220(a)(2); and 
1026.220(a)(2).
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    (3) Recordkeeping (procedures for making and maintaining a record 
of all information obtained under the CIP requirements); \18\
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    \18\ 31 CFR 1020.220(a)(3); 1023.220(a)(3); 1024.220(a)(3); and 
1026.220(a)(3).
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    (4) Consultation of government lists (procedures to determine 
whether the customer appears on any list of known or suspected 
terrorists or terrorist organizations issued by any Federal government 
agency, and designated as such by Treasury in consultation with the 
Federal functional regulators); \19\ and
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    \19\ 31 CFR 1020.220(a)(4); 1023.220(a)(4); 1024.220(a)(4); and 
1026.220(a)(4).
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    (5) Customer notice (procedures for providing bank customers with 
adequate notice that the bank is requesting information to verify their 
identities).\20\
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    \20\ 31 CFR 1020.220(a)(5); 1023.220(a)(5); 1024.220(a)(5); and 
1026.220(a)(5).
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    The CIP may also include procedures specifying when a financial 
institution may rely on another financial institution to perform any of 
the financial

[[Page 49427]]

institution's CIP procedures, provided certain conditions are met.\21\
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    \21\ 31 CFR 1020.220(a)(6); 1023.220(a)(6); 1024.220(a)(6); and 
1026.220(a)(6).
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Part 2. Traditional Annual PRA Burden and Cost

    In the past, the scope of the traditional annual PRA burden 
estimates of the CIP differed according to the type of financial 
institution involved:
    (a) For banks, futures commission merchants, and introducing 
brokers in commodities, due to the practical challenges of obtaining 
the total number of new accounts opened per year, the estimate was 
limited to the annual hourly burden of maintaining and updating the 
written CIP, and providing customers with adequate notice that the 
financial institution was requesting information to verify their 
identities. The estimate did not take into account the hourly burden of 
implementing the other CIP requirements (i.e., verification and 
recordkeeping requirements, and consulting government lists).
    (b) For brokers or dealers in securities and mutual funds, where 
FinCEN obtained the approximate numbers of new accounts opened per 
year, the estimate took into consideration the annual hourly burden to 
implement the CIP requirements for all new customers, which included 
identity verification, recordkeeping, and consulting government lists. 
The estimate did not take into account the hourly burden of maintaining 
and updating the written CIP or customer notification of CIP 
requirements.
    For purposes of this renewal and the associated estimate of the 
traditional annual PRA burden, FinCEN is making the following 
assumptions:
    (a) For banks, futures commission merchants, and introducing 
brokers in commodities:
    i. FinCEN continues estimating the annual hourly burden of 
maintaining and updating the CIP at ten hours per financial 
institution. This estimate covers: (a) The hourly burden of updating 
the CIP 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 non-documentary methods for 
verifying identifying information the financial institution intends to 
use; and (b) presenting the updated CIP to the appropriate level of 
management within the financial institution for approval.
    ii. FinCEN continues estimating the hourly burden of providing 
customers with notification of the CIP at one hour annually per 
financial institution.
    (b) For brokers or dealers in securities and mutual funds:
    i. FinCEN continues estimating the hourly burden of obtaining and 
verifying a customer's identity (i.e., verification and recordkeeping 
requirements, and consulting government lists) at two minutes per new 
account opened.
    ii. FinCEN is also incorporating the annual hourly burden of 
maintaining and updating the CIP at ten hours per financial 
institution. This estimate covers: (a) The hourly burden of updating 
the CIP 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 non-documentary methods for 
verifying identifying information the financial institution intends to 
use; and (b) presenting the updated CIP to the appropriate level of 
management within the financial institution for approval.
    iii. In addition, FinCEN is incorporating an estimate of the hourly 
burden of providing customers with notification of the CIP at one hour 
annually per financial institution.
    Under these assumptions, FinCEN's estimate of the traditional 
annual PRA burden is 1,152,985 hours, as detailed in Tables 2 and 
3.\22\
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    \22\ The total estimate of the traditional annual PRA burden is 
the summation of the total hourly burden of CIP maintenance 
(169,380), notification (16,938) and implementation (966,667) as set 
out in Table 1 and 2.
    \23\ As set out in Table 1 above.
    \24\ As set out in Table 1 above.

    Table 2--Hourly Burden Associated With Maintaining and Updating the CIP and Customer Notification for All
                                         Covered Financial Institutions
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                                     Number of    Time per financial institution        Total hourly burden
                                     financial   ---------------------------------------------------------------
  Type of financial institution    institutions     Maintenance    Notification
                                       \23\           (hours)         (hours)       Maintenance    Notification
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Banks...........................          10,542              10               1         105,420          10,542
Futures commission merchants....              61              10               1             610              61
Introducing brokers in                     1,104              10               1          11,040           1,104
 commodities....................
Brokers or dealers in securities           3,640              10               1          36,400           3,640
Mutual funds....................           1,591              10               1          15,910           1,591
                                 -------------------------------------------------------------------------------
    Totals......................          16,938  ..............  ..............         169,380          16,938
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     Table 3--Hourly Burden Associated With Implementation of the Identity Verification, Recordkeeping, and
         Consulting Government Lists Requirements for Brokers or Dealers in Securities and Mutual Funds
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                                                     Number of
                                                     financial     New accounts    Time per  new   Total hourly
          Type of financial institution            institutions      per year         account        burden *
                                                       \24\                          (minutes)
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Brokers or dealers in securities................           3,640       9,000,000               2         300,000
Mutual funds....................................           1,591      20,000,000               2         666,667
                                                 ---------------------------------------------------------------
    Totals......................................           5,231  ..............  ..............         966,667
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* New accounts per year times two minutes, divided by 60 minutes per hour


[[Page 49428]]

    To calculate the hourly burden estimates in this notice, FinCEN 
identified four roles and corresponding staff positions involved in 
maintaining and implementing the CIP: (i) General oversight (board of 
directors and/or senior management); (ii) general supervision 
(providing process oversight); (iii) direct supervision (reviewing 
operational-level work and cross-checking all or a sample of the work 
product against supporting documentation); and (iv) clerical work 
(engaging in research and administrative review, and recordkeeping).
    FinCEN calculated the fully-loaded hourly wage for each of these 
four roles by taking the median wage as estimated by the U.S. Bureau of 
Labor Statistics (BLS), and computing an additional benefits cost as 
follows: \25\
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    \25\ The U.S. Bureau of Labor Statistics, Occupational 
Employment Statistics-National, May 2019, available at https://www.bls.gov/oes/tables.htm. The most recent data from the BLS 
corresponds to May 2019. For the benefits component of total 
compensation, see U.S. Bureau of Labor Statistics, Employer's Cost 
per Employee Compensation as of December 2019, available at https://www.bls.gov/news.release/ecec.nr0.htm. The ratio between benefits 
and wages for financial activities, credit intermediation and 
related activities is $15.95 (hourly benefits)/$32.05 (hourly wages) 
= 0.50. The benefit factor is 1 plus the benefit/wages ratio, or 
1.50. Multiplying each hourly wage by the benefit factor produces 
the fully-loaded hourly wage per position.

  Table 4--Fully-Loaded Hourly Wage by Role and BLS Job Position for All Financial Institutions Covered by This
                                                     Notice
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                                                                   Median hourly                   Fully-loaded
              Role                 BLS-code        BLS-name            wage       Benefit factor    hourly wage
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Board of directors/senior            11-1010  Chief Executive...          $88.68            1.50       * $133.02
 management.
General supervision............      11-3031  Financial Manager.           62.45            1.50           93.68
Direct supervision.............      13-1041  Compliance Officer           33.20            1.50           49.80
Clerical work (research,             43-3099  Financial Clerk...           20.40            1.50           30.60
 review, and recordkeeping).
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* $133.20 rounded to $133.00.

    FinCEN estimates that, in general and on average,\26\ each role 
would spend different amounts of time on each portion of the 
traditional annual PRA burden, as follows:
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    \26\ By ``in general,'' FinCEN means without regard to outliers 
(e.g., financial institutions with CIPs with complexities that are 
uncommonly higher or lower than those of the population at large). 
By ``on average,'' FinCEN means the mean of the distribution of each 
subset of the population.
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    (a) For annually maintaining and updating the CIP, estimated at ten 
hours per covered financial institution, the cost of each hour of 
burden would be broken down as follows: (i) One burden hour at $133.00, 
representing the cost of board of directors or senior management review 
and approval, and (ii) nine hours of work by other staff, averaging 
$48.00, as set out in Table 5 below:

      Table 5--Weighted Average Hourly Cost of Maintaining and Updating the CIP and Obtaining Board Approval for All Covered Financial Institutions
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           General  supervision                         Direct  supervision                     Clerical work (case review)
-----------------------------------------------------------------------------------------------------------------------------------   Weighted  average
        %time              Hourly cost              %time              Hourly cost              %time              Hourly cost           hourly cost
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              10%                 $9.37                   60%                $29.88                   30%                 $9.18              * $48.00
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* $48.43 rounded to $48.00.

    (b) For providing customers notification of the CIP, estimated at 
one hour per covered financial institution, the cost of each hour of 
burden would be $32.00, as set out in Table 6 below:

                 Table 6--Weighted Average Hourly Cost of Providing Customer Notification of CIP for All Covered Financial Institutions
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           General  supervision                         Direct  supervision                     Clerical work (case review)
-----------------------------------------------------------------------------------------------------------------------------------   Weighted  average
        %time              Hourly cost              %time              Hourly cost              %time              Hourly cost           hourly cost
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               0%                 $0.00                    5%                 $2.49                   95%                $29.07              * $32.00
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* $31.56 rounded to $32.00.

    (c) For obtaining and verifying customers' identification 
information for purposes of implementing CIP, estimated at two minutes 
per account, per broker or dealer in securities or mutual fund, the 
cost of each hour of burden would be $33.00, as reflected in Table 7 
below:

[[Page 49429]]



   Table 7--Weighted Average Hourly Cost of Obtaining and Verifying Customers' Identifying Information for Brokers or Dealers in Securities and Mutual
                                                                          Funds
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           General  supervision                         Direct  supervision                     Clerical work (case review)
-----------------------------------------------------------------------------------------------------------------------------------   Weighted  average
        %time              Hourly cost              %time              Hourly cost              %time              Hourly cost           hourly cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
               1%                 $0.94                    9%                 $4.48                   90%                $27.54              * $33.00
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* $32.96 rounded to $33.00.

    The total estimated cost of the traditional annual PRA burden is 
$42,011,997, as reflected in Table 8 below:

                                                  Table 8--Total Cost of Traditional Annual PRA Burden
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                                                           Total burden                                     Hourly cost
                  Task                   ------------------------------------------------------------------------------------------------   Total cost
                                               Hours                  Source                     $                    Source
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Board of directors/senior management            * 16,938  Table 2.......................         $133.00  Table 4.......................      $2,252,754
 approval of CIP.
Maintaining and updating the CIP........       * 152,442  Table 2.......................           48.00  Table 5.......................       7,317,216
Customer notification of CIP............          16,938  Table 2.......................           32.00  Table 6.......................         542,016
Implementing the CIP (identifying and            966,667  Table 3.......................           33.00  Table 7.......................      31,900,011
 verifying customer information,
 maintain records, and consulting
 government lists).
                                         ---------------------------------------------------------------------------------------------------------------
    Totals..............................       1,152,985  ..............................  ..............  ..............................      42,011,997
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* As explained in item (a) above, the ten hours required for maintaining and updating a written CIP is broken down as follows: One hour per covered
  financial institution for senior management approval of the written CIP (16,938 covered financial institutions multiplied by one hour equals 16,938
  hours in total) at $133.00 an hour; and nine hours per covered financial institution for maintaining and updating the written CIP (16,938 multiplied
  by nine hours equals 152,442 hours in total) at $48.00 an hour.

Part 3. Supplemental Annual PRA Burden

    In the future, FinCEN intends to add a supplemental annual PRA 
burden calculation for the CIP and apply the same scope and criteria 
for estimating annual PRA burden and cost to all covered financial 
institutions. For banks, futures commission merchants, and introducing 
brokers in commodities, the calculation of the future supplemental 
annual PRA burden will include adding an annual hourly burden and cost 
estimate reflecting the work involved in: Verifying the identity of 
each customer; making and maintaining a record of all information 
obtained under the CIP; and determining whether a new customer appears 
on any list of known or suspected terrorist organizations issued by any 
Federal government agency.
    FinCEN does not have the necessary information to provide a 
tentative estimate of these supplemental annual PRA hourly burdens and 
costs within the current notice. FinCEN also recognizes that it does 
not have all the necessary information to precisely estimate the 
traditional annual PRA burden. For that reason, FinCEN is relying on 
estimates used in prior renewals of OMB control numbers and applicable 
regulations. FinCEN further recognizes that after receiving public 
comments, the hourly burden and cost estimates for the traditional 
annual PRA burden may vary significantly. FinCEN intends to conduct 
more granular studies of the actions included in the proposed scope of 
a supplemental annual PRA burden in the near future, to arrive at more 
precise estimates of net BSA hourly burden and cost.\27\ The data 
obtained in these studies also may result in a significant variation of 
the estimated traditional annual PRA hourly burden.
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    \27\ Net hourly burden and cost are the burden and cost a 
financial institution incurs to comply with requirements that are 
unique to the BSA, and that do not support any other business 
purpose or regulatory obligation of the financial institution. 
Burden for purposes of the PRA does not include the time and 
financial resources needed to comply with an information collection 
if the time and resources are for things a business (or other 
person) does in the ordinary course of its activities if the agency 
demonstrates that the reporting activities needed to comply are 
usual and customary. 5 CFR 1320.3(b)(2)
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    Estimated Recordkeeping Burden: Due to differences in the 
availability of information, resulting in differences in scope and 
criteria used to calculate the burden estimates, the average estimated 
annual PRA burden, measured in hours per respondent, is (a) 11 hours 
for all covered financial institutions to comply with the CIP 
maintenance and notice requirements (i.e., ten hours for maintenance, 
and one hour for notice per financial institution, as set out in Table 
2), and (b) 185 hours for brokers and dealers in securities and mutual 
funds to comply with the CIP verification, recordkeeping, and 
consulting government lists requirements (i.e., the result of dividing 
the total number of burden hours (966,667) by the total number of 
financial institutions (5,231), as set out in Table 3).
    Estimated Number of Respondents: 16,938, as set out in Table 1.
    Estimated Total Annual Responses: Due to the different scope and 
criteria used for the estimates, the estimates are (a) 16,938 for all 
covered financial institutions; and (b) 29,000,000 new accounts added 
per year by brokers or dealers in securities, and mutual funds.
    Estimated Total Annual Recordkeeping Burden: The estimated total 
annual PRA burden is 1,152,985 hours, as set out in Tables 2 and 3.
    Estimated Total Annual Recordkeeping Cost: The estimated total 
annual PRA cost is $42,011,997, as set out in Table 8.
    An Agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless the collection of 
information displays a valid OMB control number. Records required to be 
retained under the BSA must be retained for five years.

[[Page 49430]]

Part 4. Request for Comments

    (a) Specific request for comments on the revised traditional annual 
PRA burden and cost.
    FinCEN invites comments on any aspect of the revision of the 
traditional annual PRA burden, as set out in Part 2 of this notice. In 
particular, FinCEN seeks comments on the adequacy of: (i) FinCEN's 
assumptions underlying its estimate of the burden; (ii) the estimated 
number of hours required by each portion of the burden; and (iii) the 
organizational levels of the financial institution engaged in each 
portion of the burden, their estimated hourly remuneration, and the 
estimated proportion of participation by time at each level. FinCEN 
encourages commenters to include any publicly available source for 
alternative estimates or methodologies.
    (b) Specific request for comments on the proposed criteria for 
determining the scope of a supplemental annual PRA hourly burden and 
cost estimate.
    FinCEN invites comments on any aspect of the criteria for a future 
estimate of the supplemental annual PRA burden, as set out in Part 3 of 
this notice.
    (c) Specific request for comments on the criteria and methodology 
needed to obtain information to realistically estimate the supplemental 
annual PRA hourly burden and cost.
    FinCEN invites comments on the most appropriate and comprehensive 
means of questioning financial institutions about the hourly burden and 
cost attributable solely to CIP-related activities (i.e., the hourly 
burden and cost of complying with the recordkeeping requirements 
imposed exclusively by the BSA, which are not used to satisfy 
contractual obligations, other regulatory requirements, or business 
purposes of the financial institution). For example, depending on the 
nature of the account, a financial institution may be collecting and 
maintaining some of the same customer identification information 
required by the CIP in order to satisfy other obligations including (i) 
protecting the financial institution from fraud against itself or its 
customers, (ii) complying with other non-BSA regulatory requirements 
such as those imposed by the specific federal functional regulator, or 
(iii) improving the financial institution's marketing efforts or the 
quality of its managerial information products.
    The estimate of the annual PRA hourly burden and cost of the CIP 
must take into consideration only the effort involved in obtaining 
those data elements that are used exclusively for complying with CIP 
requirements. Given the obvious complexity in determining what portion 
of the effort to include in the estimate, FinCEN seeks comments from 
the public about how best to frame the questions and define the 
requirements, according to the business uses of financial institutions 
covered by this notice. Also, due to the evident difficulty involved in 
estimating the number of new accounts opened during the year, as a 
proxy for new accountholders subject to CIP requirements, FinCEN 
welcomes any suggestions as to how to derive this estimate by using 
publicly available financial information.
    (d) Specific questions for comment associated with the five CIP 
requirements:
    (1) Written CIP--If a bank is required to have an AML program, the 
CIP must be part of the AML program.
     On average, how long does it take your financial 
institution to revise its written CIP annually?
     Does the process require review and approval by senior 
management?
     How long does it take your financial institution to go 
through the internal governance process to get the CIP approved?
     How much time on an annual basis does the compliance team 
spend training the business units or other compliance members on the 
CIP and associated updates?
    (2) Identity verification procedures--the CIP must include risk-
based procedures for verifying the identity of each customer to the 
extent reasonable and practicable.
     On average how many new accounts does your financial 
institution open per year?
    [cir] How many accounts are for new customers?
    [cir] How many accounts are new personal accounts?
    [cir] How many accounts are new business accounts?
     How long does it take your financial institution to open a 
new account for an existing customer?
     How long does it take your financial institution to 
conduct identity verification procedures for a new personal or business 
account?
     Is the collection of customer identification information 
exclusively to comply with the CIP requirements, or is it also to 
comply with other regulatory requirements or for other business 
reasons?
    (3) Recordkeeping--the CIP must include procedures for making and 
maintaining a record of all information obtained under the CIP 
requirements.
     Are all CIP records stored electronically? If not, please 
provide details as to the type of storage method used.
     How long does it take to store a customer's CIP 
information electronically?
     How long does it take to store a customer's CIP 
information by other means?
     Is the process of storing CIP information an automated or 
manual process at your financial institution?
     Does your financial institution have to invest in specific 
technology to maintain these records? If so, what is the cost of 
implementation and maintenance annually?
     Is the technology exclusively to comply with the CIP, or 
is it also to comply with other regulatory requirements?
    (4) Consulting government lists--the CIP must include procedures 
for determining whether the customer appears on any list of known or 
suspected terrorists or terrorist organizations issued by any Federal 
government agency, and designated as such by Treasury in consultation 
with the Federal functional regulators.
     How long does it take your financial institution to check 
a new customer against suspected terrorist lists issued by the Federal 
government?
     Do you use an automated system, a hybrid of an automated 
system and manual process, or a completely manual process to conduct 
the searches?
     Does your financial institution have to invest in specific 
technology to conduct the searches? If so, what is the cost of 
implementation and maintenance annually?
     Is the consultation of government lists exclusively to 
comply with the CIP requirements, or does it overlap with other 
regulatory requirements?
     What other regulatory or business requirements overlap 
with the CIP requirements for your financial institution?
    (5) Customer notice--the CIP must include procedures for providing 
bank customers with adequate notice that the bank is requesting 
information to verify their identities.
     How does you financial institution provide notification to 
customers of CIP requirements?
     Does your financial institution use a sign-in the 
institution's offices, notices contained in account opening documents, 
including electronic notification in the case of online account 
opening, or general notifications on the institution's website, or a 
combination of both?

[[Page 49431]]

     How often does your financial institution update the 
notice to customers regarding CIP?
     What governance process does the financial institution 
follow prior to making a new update?
    (6) The CIP is not required to, but 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, if certain conditions are met.
     What percentage of the time does your financial 
institution rely on another financial institution or associated 
affiliate to conduct CIP on new customers?
     What is the burden on your financial institution to vet 
another financial institution or associated affiliate, annually, in 
order to rely on them to conduct CIP? What are your vetting process 
criteria?
    (e) General request for comments.
    Comments submitted in response to this notice will be summarized 
and/or included in the request for OMB approval. All comments will 
become a matter of public record. Comments are invited on: (i) Whether 
the collection of information is necessary for the proper performance 
of the functions of the agency, including whether the information shall 
have practical utility; (ii) the accuracy of the agency's estimate of 
the burden of the collection of information; (iii) ways to enhance the 
quality, utility, and clarity of the information to be collected; (iv) 
ways to minimize the burden of the collection of information on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and (v) estimates 
of capital or start-up costs and costs of operation, maintenance, and 
purchase of services to provide information.

    Dated: August 7, 2020.
Michael Mosier,
Deputy Director, Financial Crimes Enforcement Network.
[FR Doc. 2020-17694 Filed 8-12-20; 8:45 am]
BILLING CODE 4810-02-P