Dustin N. Nofziger

Counsel Dustin Nofziger, a member of the Financial Institutions Practice, and Partner Pinchus D. Raice, Co-Chair of the Financial Institutions Practice, co-authored the article, “The Trump Administration Should Dispose of the FFIEC Manual,” published in the July 11, 2025, issue of American Banker.

The article discusses how the Federal banking agencies have supplemented their longstanding pillar regulations, which set forth the four skeletal pillars of a BSA/AML compliance program, with a BSA/AML examination manual (the FFIEC Manual) that they incorrectly apply as law. Dustin and Pinchus explain that nonbinding guidance such as the FFIEC Manual, which was created without formal rulemaking procedures, does not have the force or effect of law. They further explain that the skeletal pillar regulations themselves were hastily promulgated by the banking agencies in 1987, on an emergency basis, without the notice-and-comment rulemaking normally required. They note that financial crime compliance costs U.S. financial institutions $59 billion annually, and argue that economically significant, substantive rules – such as those included in the FFIEC Manual – that the banking agencies wish to impose on financial institutions should be promulgated through notice-and-comment rulemaking that allows for public comment.

Dustin and Pinchus urge the Trump administration to dispose of the FFIEC Manual in its current form and to subject every rule that the banking agencies propose to the rigor of notice-and-comment rulemaking. They further note that a longstanding judicial deference doctrine that was previously applied by the courts to defer to the banking agencies’ interpretations of the pillar regulations set forth in the FFIEC Manual is ripe for the Supreme Court to overrule, providing financial institutions with leverage in discussions with regulators.

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