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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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Tell the Senate: It's Time to Modernize Anti-Money Laundering Rules

The House has passed a bill that, among other things, would direct the Financial Crimes Enforcement Network to create a national database of businesses’ beneficial ownership information and enhance communications between banks and law enforcement. Now it's time for the Senate to pass similar, much needed, modernizing reforms. Urge the Senate to build on the momentum and move quickly to pass legislation to improve financial transparency and close a massive loophole in our country’s anti-money laundering network as well as enhance national efforts to combat money laundering and other forms of illicit finance.

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Related Training & Events

  • ABA/ABA Financial Crimes Enforcement Conference

    Conference | December 7-9, 2020

    December 6-8, 2020 | Washington, DC | A premier educational event that has become a trusted resource for insights, expertise and tactics to protect your bank.

  • The Intersection of Domestic PEP Monitoring and Political Corruption

    Recorded Webinar | October 8, 2019

    This webinar will address how financial institutions can monitor PEPs without becoming inundated with both false positive alerts and unnecessary alerts.

  • BSA/AML: SAR Filing

    Self-Paced Training

    Describes the BSA requirements for a bank to file a Suspicious Activity Report and why federal law limits sharing information about a SAR.

  • Board Oversight: BSA/AML/OFAC

    Self-Paced Training

    Key responsibility for overseeing the creation and maintenance of a culture of compliance with BSA/AML rules and the OFAC trade sanctions.

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