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3 min read

Can’t You Hear Me Knocking?

I have a comment…[1]

The challenge in offering suggestions on how to respond to any age-old process in today’s environment, is that nothing appears normal. Regardless, we have discussed here at AML RightSource that it could be helpful to offer our thoughts on responding to proposed rulemakings at the federal or state level. Having many years of experience with this process, and making an assumption (perhaps large today) that comments will be well considered by the agency or agencies receiving them, we offer our thoughts on crafting a successful comment letter.

 An overview of the regulatory comment process

Many times when laws are enacted, any requirements under that law are not implemented until there is a regulation crafted by the agency(s) charged with oversight or enforcement of the requirements by the legislature. This process is actually a positive part of the legal process. A notice and comment process on changes anticipated by a new law, allows the public and specifically the industries that will be impacted, the opportunity to offer evidence on operational, legal or practical challenges about how the proposed regulation is crafted. One thing you’d want to avoid is elected officials, at the state or federal level, passing a law that includes requirements that go into effect immediately.

As an aside, the notion perpetuated by certain factions, that an agency crafting a regulation is giving too much authority to the agency, belies the fact that there is a public comment process and the agency in question have experts in that particular area of the law.

Crafting an Effective Comment Letter

As you approach the comment letter process, part of the consideration is whether to provide your views as an organization, institution or as an individual. For most of the AML/Financial Crimes compliance community, you are probably part (or your institution is) of a trade association or a firm. As a former trade association official, I always tried to provide an outline for our members regarding the key components of the proposal, collected input from institutions of all sizes (and in some cases did surveys in case there was some debate among membership of the scope of the proposal). For example, large institutions have different challenges than smaller entities and vice versa, so an association needs to include all sides of those issues in the comment letter.

As for firms, if you do comment, you may wish to make sure you are providing input from your client base. I’d encourage you to take note that the politics of this process usually prove difficult to manage. Institutions should (and often do), comment on a proposal which may be even more effective than those by trade groups.

Now for some comment letter strategies:

  • Be specific: Respond to the proposal with how you believe it will impact your institution or industry. Just opposing the proposal outright almost never works. Remember, most regulations emanate from legislative action, so it is too late to attack the premise. Instead, offer operational, financial and other ways you may be impacted.
  • Offer specific alternatives: If the proposal requires a certain type or amount of, for example, recordkeeping, explain why that may be problematic and potential solutions, if relevant.
  • File on time: This one sounds obvious but a late comment letter may not be accepted and really makes no sense. Sometimes, you may comment asking for an extension, particularly if the time period was unreasonably short; but if that is not the case, file on time.
  • Comment on the actual proposal: Now I admit that there were some times during my career that I took a Notice of Proposed Rulemaking as an opportunity to raise tangential (but relevant) issues, but that was mostly when there had been no chance to previously argue a unique part of a regulation or policy. If you stray from the proposal, say you are and why.
  • Copy all relevant agencies: In most cases, comments are due to the agency originating the proposal but there may be other agencies that have a legal or policy interest in the proposal. For example a comment letter to FinCEN may be of interest to all banking agencies, law enforcement and possibly the legislature. Find out the best point of contact in those other agencies and share your thoughts and recommendations.
  • Publicize your views: In today’s world, if no one sees your comments, do they matter? Use social media, trade and mainstream publications as well as any email list you have.

We are fortunate in the United States to have a notice and comment process. In order to see positive changes for the industry, we must take ownership of the review and comment process. Utilize it and let’s not see it go to waste. After all, we’re the ones that will be expected to follow the legislative updates – let’s make sure they work towards the bettering of the community.


[1] Can’t You Hear Me Knocking is a Rolling Stones song from 1971’s Sticky Fingers and was voted 25th on the list of the 100 greatest guitar songs of all time