The OCIF Regulatory Framework in Comparative Perspective with OCC and FDIC: Implications for AML Compliance at International Digital Banks (Scientific Journal of Applied Social and Clinical Science)

Summary

• The article compares Puerto Rico's Office of the Commissioner of Financial Institutions regulatory framework with U.S. federal supervisory models of the OCC and FDIC.p.2
• Puerto Rico's Law No. 273 of 2012 establishes minimum paid-in capital requirements of $10 million for International Financial Entities.p.4
• Reforms enacted in 2023 and 2024 expanded OCIF supervisory powers following its loss of accreditation with the CSBS in 2023.p.4
• FinCEN initiated a process in 2024 to modernize Bank Secrecy Act requirements toward risk-based compliance programs.p.5
• International Financial Entities and International Banking Entities operate outside the U.S. federal deposit insurance guarantee system.p.5

Key insights

1. OCC-supervised institutions operate under ongoing supervision with dedicated regulatory teams, whereas FDIC supervision relies on periodic examination cycles.p.3
2. Law No. 273 of 2012 pairs low corporate income tax rates with a $10 million minimum paid-in capital requirement for IFEs.p.4
3. OCIF lost its accreditation with the Conference of State Bank Supervisors in 2023, prompting legislative reforms in 2023 and 2024.p.4
4. IFEs and IBEs licensed in Puerto Rico operate without FDIC deposit insurance coverage.p.5
5. FinCEN began modernizing Bank Secrecy Act requirements in 2024 to focus on risk-based controls and advanced analytics.p.5
6. International correspondent banks often apply due diligence standards that equal or exceed local regulatory standards.p.6
7. Financial institutions operating across multiple jurisdictions face severe reputational and operational risks when adhering strictly to minimal local AML requirements.p.6