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Bank Secrecy Act / Anti-Money Laundering (BSA/AML) Reform

The Role of Banks in an Efficient and Effective Anti-Money Laundering Program

ABA Position

ABA recognizes the important role banks play in the fight against terrorist financing, money laundering, and other financial crimes. However, over time BSA/AML regulations have evolved into a layered and inefficient system that does not serve the needs of law enforcement and places unnecessarily onerous requirements on banks. The ABA supports reforming BSA requirements to better support government efforts to track illegal financial transactions by:

  • Creating a federal “beneficial ownership” registry to simplify the process for banks to identify the real people behind the legal entities they serve
  • Streamlining information sharing between banks, and between banks and law enforcement, to ensure that resources are being appropriately allocated to address current law enforcement priorities
  • Raising the Currency Transaction Report (CTR) threshold, which has not been adjusted since it was established in 1970, to reflect 50 years of inflation and refocus resources on truly suspicious transactions
  • Adopting a seasoned customer exemption that would let banks exempt customers, within parameters established by Treasury, to eliminate unnecessary CTR filings, and
  • Adopting a risk-based compliance approach to BSA/AML exams in order to make the most productive use of AML resources.

ABA has been partnering with law-makers, federal banking regulators, law enforcement groups, and bankers to find common sense improvements to the current framework that will support law enforcement while minimizing unnecessary regulatory burdens. Some of the needed improvements, like creating a federal beneficial ownership registry, are statutory changes and will require action by Congress. Others, like improving information sharing and applying a risk-based approach to AML/BSA exams, can be achieved through regulatory adjustments.

In Congress, ABA supports several pieces of legislation aimed at strengthening the BSA/AML system:

  • “The Corporate Transparency Act of 2019,” (H.R. 2513) introduced by Representative Maloney (D- NY)
  • “The COUNTER Act of 2019,” (H.R. 2514) introduced by Representative Cleaver (D- MO)
  • “The Illicit Cash Act,” (S. 2563) introduced by Senators Warner (D-VA), Jones (D- AL), Menendez (D- NJ), Cortez Masto (D- NV), Cotton (R- AR), Rounds (R- SD), Kennedy (R- LA), and Moran ((R- KS).

ABA also actively supports regulatory initiatives designed to improve the BSA/AML system:

  • Interagency cooperation among the prudential regulators to identify steps that can streamline the process and eliminate inefficiencies, particularly steps to promote innovation.
  • FinCEN efforts to identify metrics that can quantify and measure success to ensure that resources are used wisely.
  • FinCEN efforts to evaluate the effectiveness of the BSA compliance regime to identify steps that can eliminate unnecessary reporting, facilitate information sharing between financial institutions and to-and-from law enforcement.
  • Efforts to identify and share law enforcement priorities with the financial sector to let banks make the most efficient and effective use of limited resources.
  • Ensuring that the risk-based approach to BSA compliance is reflected in the examination process, keeping the FFIEC BSA/AML examination manual updated, and providing interagency and regular training for BSA examiners.
  • Creating a federal “beneficial ownership” registry to simplify the process for banks to identify the real people behind the legal entities they serve
  • Streamlining information sharing between banks, and between banks and law enforcement, to ensure that resources are being appropriately allocated to address current law enforcement priorities
  • Raising the Currency Transaction Report (CTR) threshold, which has not been adjusted since it was established in 1970, to reflect 50 years of inflation and refocus resources on truly suspicious transactions
  • Adopting a seasoned customer exemption that would let banks exempt customers, within parameters established by Treasury, to eliminate unnecessary CTR filings, and
  • Adopting a risk-based compliance approach to BSA/AML exams in order to make the most productive use of AML resources.

ABA has been partnering with law-makers, federal banking regulators, law enforcement groups, and bankers to find common sense improvements to the current framework that will support law enforcement while minimizing unnecessary regulatory burdens. Some of the needed improvements, like creating a federal beneficial ownership registry, are statutory changes and will require action by Congress. Others, like improving information sharing and applying a risk-based approach to AML/BSA exams, can be achieved through regulatory adjustments.

In Congress, ABA supports several pieces of legislation aimed at strengthening the BSA/AML system:

  • “The Corporate Transparency Act of 2019,” (H.R. 2513) introduced by Representative Maloney (D- NY)
  • “The COUNTER Act of 2019,” (H.R. 2514) introduced by Representative Cleaver (D- MO)
  • “The Illicit Cash Act,” (S. 2563) introduced by Senators Warner (D-VA), Jones (D- AL), Menendez (D- NJ), Cortez Masto (D- NV), Cotton (R- AR), Rounds (R- SD), Kennedy (R- LA), and Moran ((R- KS).

ABA also actively supports regulatory initiatives designed to improve the BSA/AML system:

  • Interagency cooperation among the prudential regulators to identify steps that can streamline the process and eliminate inefficiencies, particularly steps to promote innovation.
  • FinCEN efforts to identify metrics that can quantify and measure success to ensure that resources are used wisely.
  • FinCEN efforts to evaluate the effectiveness of the BSA compliance regime to identify steps that can eliminate unnecessary reporting, facilitate information sharing between financial institutions and to-and-from law enforcement.
  • Efforts to identify and share law enforcement priorities with the financial sector to let banks make the most efficient and effective use of limited resources.
  • Ensuring that the risk-based approach to BSA compliance is reflected in the examination process, keeping the FFIEC BSA/AML examination manual updated, and providing interagency and regular training for BSA examiners.
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