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TCH Files Comment Letter Arguing Against the OCC’s Proposed MLR System Expansion

The Clearing House (TCH) submitted a comment letter to the OCC on its proposed extension of its Bank Secrecy Act/Money Laundering Risk Assessment reporting requirement, also known as the Money Laundering Risk (MLR) System, to large and midsize banks within its jurisdiction. In the letter, TCH argued that: (i) there is no prudential or supervisory benefit to requiring the use of the MLR System for large or midsize banks that have full-time, embedded examiners on site; (ii) the proposal significantly underestimates the burden that will actually be imposed on financial institutions if the OCC were to extend the application of the MLR System; (iii) expanding the MLR System’s “one-size-fits all” information collection requirement to large and midsize banks is inconsistent with the OCC’s tailored supervisory approach to identifying BSA/AML risks and the uniform, risk-based framework for addressing BSA/AML risks established by the federal banking agencies and FinCEN; and (iv) at a minimum, should the OCC intend to expand the MLR System to large and midsize institutions, it should do so through a public notice and comment process that would explain the reasons for and attempt to justify the costs and burden of the expansion of the system.