As 2021 drew to a close, financial institutions were under mounting pressure to comply with the approaching deadlines established under the Anti-Money Laundering Act (AMLA) of 2020. Passed as part of the National Defense Authorization Act, the AMLA represents the most sweeping overhaul of U.S. anti-money laundering regulations in decades. Its provisions touch nearly every facet of compliance, from beneficial ownership disclosures to expanded whistleblower protections, and from innovation in transaction monitoring to the establishment of stronger penalties for non-compliance.

Among the most pressing requirements was the new Beneficial Ownership Information (BOI) reporting rule. This rule mandates that corporations, LLCs, and similar entities provide detailed information about their beneficial owners to FinCEN, which will maintain a secure, non-public registry. Financial institutions are expected to use this data to strengthen their Know Your Customer (KYC) and Customer Due Diligence (CDD) programs. The AMLA also called for enhanced coordination between regulators and financial institutions, making it critical for compliance teams to actively engage with updated guidance and industry alerts.

Furthermore, the act introduced substantial enhancements to FinCEN’s investigative authority and increased penalties for individuals found guilty of egregious violations. Whistleblower incentives were also expanded to encourage reporting of significant AML violations. Institutions must now integrate these changes into their governance, training, and monitoring systems.

The implications are clear: compliance teams must not only understand the letter of the law but also its intent—to create a proactive, risk-based, and intelligence-led approach to combating financial crime. Timely implementation and cross-departmental coordination are critical to ensure preparedness for upcoming regulatory audits and examinations.