[Federal Register Volume 89, Number 169 (Friday, August 30, 2024)]
[Notices]
[Pages 70690-70692]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-19593]


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DEPARTMENT OF THE TREASURY


Agency Information Collection Activities; Submission for OMB 
Review; Comment Request; Customer Identification Program Regulatory 
Requirements for Certain Financial Institutions

AGENCY: Departmental Offices, U.S. Department of the Treasury.

ACTION: Notice of information collection; request for comment.

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SUMMARY: The Department of the Treasury will submit the following 
information collection requests to the Office of Management and Budget 
(OMB) for review and clearance in accordance with the Paperwork 
Reduction Act of 1995, on or after the date of publication of this 
notice. The public is invited to submit comments on these requests.

DATES: Comments should be received on or before September 30, 2024 to 
be assured of consideration.

ADDRESSES: Written comments and recommendations for the proposed 
information collection should be sent within 30 days of publication of 
this notice to www.reginfo.gov/public/do/PRAMain. Find this particular 
information collection by selecting ``Currently under 30-day Review--
Open for Public Comments'' or by using the search function.

FOR FURTHER INFORMATION CONTACT: Copies of the submissions may be 
obtained from Spencer W. Clark by emailing [email protected], calling 
(202) 927-5331, or viewing the entire information collection request at 
www.reginfo.gov.

SUPPLEMENTARY INFORMATION:

Financial Crimes Enforcement Network (FinCEN)

    Title: Customer Identification Program Regulatory Requirements for 
Certain Financial Institutions.
    OMB Control Numbers: 1506-0022, 1506-0026, 1506-0033, 1506-0034.
    Type of Review: Extension without change of a currently approved 
collection.
    Description: The legislative framework generally referred to as the 
Bank Secrecy Act (BSA) consists of the Currency and Foreign 
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) and 
other legislation, including the Anti-Money Laundering Act of 2020 (AML 
Act). The BSA is codified at 12 U.S.C. 1829b, 1951-1960 and 31 U.S.C. 
5311-5314, 5316-5336, including notes thereto, with implementing 
regulations at 31 CFR chapter X.
    The BSA authorizes the Secretary of the Treasury (Secretary) to, 
inter alia, require financial institutions to keep records and file 
reports that are determined to have a high degree of usefulness in 
criminal, tax, or regulatory matters, risk assessments or proceedings, 
or in the conduct of intelligence or counter-intelligence activities to 
protect against terrorism, and to implement anti-money laundering/
countering the financing of terrorism (AML/CFT) programs and compliance 
procedures. The authority of the Secretary to administer the BSA has 
been delegated to the Director of FinCEN.
    Title 31 U.S.C. 5318(l) requires the Secretary to issue regulations 
prescribing minimum standards for customer identification programs 
(CIPs) for financial institutions. Regulations implementing section 
5318(l) are as follows: (i) banks (31 CFR 1020.220); (ii) brokers-
dealers (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). Under the CIP regulations, the minimum 
requirements include: (1) implementation of a written customer 
identification program appropriate for the financial institution's size 
and type of business; (2) identity verification procedures; (3)

[[Page 70691]]

recordkeeping; (4) comparison with government lists; and (5) customer 
notice. The CIP 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, provided certain conditions 
are met.
    Form: None.
    Affected Public: Businesses or other for-profit institutions, and 
non-profit institutions.
    Estimated Number of Respondents: 16,232 financial institutions.
    Frequency of Response: On occasion.
    Estimated Recordkeeping Burden and Cost:
    In Part 1 of this notice, FinCEN describes the distribution of the 
estimated number of covered financial institutions, by type, and the 
estimated number of new accounts opened per year, by type of covered 
financial institution. In addition, Part 1 describes the primary 
characteristics of covered financial institutions' CIP requirements. In 
Part 2, FinCEN describes calculations of the estimated annual PRA 
burden based on methodology that was updated in response to public 
comments received following the initial Federal Register notice 
published on June 20, 2024 (89 FR 51940).

Part 1. Distribution of the Financial Institutions and New Accounts 
Covered by This Notice

    The distribution of financial institutions and new accounts opened 
annually that are covered by this notice, by type of financial 
institution, is as follows:

  Table 1--Distribution of Financial Institutions and New Accounts Covered by This Notice, by Type of Financial
                                                   Institution
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                                                                                                 Number of new
                   Type of financial institution                       Number of financial      accounts opened
                                                                           institutions             annually
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0022 Futures commission merchants and introducing brokers in                              954            557,000
 commodities......................................................
0026 Banks........................................................                     10,400         53,615,000
0033 Mutual Funds.................................................                      1,400         16,150,000
0034 Brokers-dealers..............................................                      3,478         28,000,000
                                                                   ---------------------------------------------
    Total.........................................................                     16,232         98,322,000
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    In connection with a variety of initiatives FinCEN is undertaking 
to implement the AML Act, FinCEN intends to conduct, in the future, 
additional assessments of the PRA burden associated with BSA 
requirements.

Part 2. Annual PRA Burden and Cost

    For all covered financial institutions, FinCEN continues estimating 
the incremental annual PRA recordkeeping burden associated with 
maintaining and updating the CIP (``maintenance'') at ten hours per 
financial institution. This estimate covers: (a) an average of 
approximately nine hours per financial institution per year associated 
with the burden of updating the records necessary to demonstrate 
compliance with CIP requirements 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 nondocumentary methods for verifying identifying 
information the financial institution intends to use; and (b) an 
average of approximately one hour per financial institution associated 
with the burden of presenting the updated CIP to the appropriate level 
of management within the financial institution and obtaining approval.
    In addition, FinCEN continues estimating the incremental annual PRA 
recordkeeping burden associated with providing customers with 
notification of the CIP (``notification'') at one hour per financial 
institution. FinCEN has increased the estimate of the incremental 
annual PRA recordkeeping burden associated with obtaining and verifying 
a customer's identity (i.e., verification and recordkeeping 
requirements, and consulting government lists) (``implementation'') to 
three minutes per new account opened.
    Under these assumptions, FinCEN's estimate of the annual 
incremental PRA burden is 5,094,652 hours, as detailed in tables 2 and 
3.

  Table 2--Incremental Annual Burden Associated With Updating and Maintaining the CIP and Customer Notification for All Covered Financial Institutions
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                                                                                         Time per financial           Burden hours per step
                                                                       Number of             institution         ------------------------------   Total
                   Type of financial institution                       financial   ------------------------------                                burden
                                                                     institutions    Maintenance   Notification     Maintenance   Notification    hours
                                                                                       (hours)        (hour)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0022 Futures commission merchants and introducing brokers in                   954            10               1           9,540           954    10,494
 commodities......................................................
0026 Banks........................................................          10,400            10               1         104,000        10,400   114,400
0033 Mutual Funds.................................................           1,400            10               1          14,000         1,400    15,400
0034 Brokers-dealers..............................................           3,478            10               1          34,780         3,478    38,258
                                                                   -------------------------------------------------------------------------------------
    Total.........................................................          16,232  ............  ..............         162,320        16,232   178,552
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  Table 3--Incremental Annual Burden Associated With Implementing the Identity Verification, Recordkeeping, and
                 Consulting Government Lists Requirements for All Covered Financial Institutions
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                                         Number of     New accounts   Time per new                 Total burden
    Type of financial institution        financial      opened per       account    Total burden   converted to
                                       institutions        year         (minutes)    in minutes        hours
----------------------------------------------------------------------------------------------------------------
0022 Futures commission merchants                954         557,000             3     1,671,000          27,850
 and introducing brokers in
 commodities........................

[[Page 70692]]

 
0026 Banks..........................          10,400      53,615,000             3   160,845,000       2,680,750
0033 Mutual Funds...................           1,400      16,150,000             3    48,450,000         807,500
0034 Brokers-dealers................           3,478      28,000,000             3    84,000,000       1,400,000
                                     ---------------------------------------------------------------------------
    Total...........................          16,232      98,322,000  ............   294,966,000       4,916,100
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    FinCEN is utilizing the same fully loaded composite hourly wage 
rate of $106.30 utilized in other OMB control number renewals and 
notices of proposed rulemakings (NPRMs) recently opened to public 
review and comment. The total estimated cost of the annual PRA burden 
is $541,561,508, as reflected in table 4 below:

                                    Table 4--Total Cost of Annual PRA Burden
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                              Task                                     Hours        Hourly cost     Total cost
----------------------------------------------------------------------------------------------------------------
Maintaining and updating the CIP (10 hours per FI)..............         162,320         $106.30     $17,254,616
Customer notification of CIP (1 hour per FI)....................          16,232          106.30       1,725,462
Implementing the CIP (identifying and verifying customer               4,916,100          106.30     522,581,430
 information, maintain records, and consulting government lists)
 (2 minutes per account.........................................
                                                                 -----------------------------------------------
    Total.......................................................       5,094,652  ..............    $541,561,508
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    Authority: 44 U.S.C. 3501 et seq.

Spencer W. Clark,
Treasury PRA Clearance Officer.
[FR Doc. 2024-19593 Filed 8-29-24; 8:45 am]
BILLING CODE 4810-02-P