Statement for the Record before the House Subcommittee on National Security, Illicit Finance, and International Financial Institutions on the hearing, "Oversight of the Financial Crimes Enforcement Network"

The American Bankers Association (ABA) appreciates the opportunity to provide a Statement for the Record for this hearing, Oversight of the Financial Crimes Enforcement Network. ABA is the voice of the nation's $26.1 trillion banking industry, which is composed of small, regional and large banks that together employ over 2 million people, safeguard $20.5 trillion in deposits and extend $13.7 trillion in loans.

Overview. ABA applauds the important steps taken so far by Treasury and its Financial Crimes Enforcement Network (FinCEN) and the federal banking agencies to modernize the U.S. anti-illicit finance regime. Yet, more work is needed to fully realize the critical reforms passed by Congress over five years ago. Modernizing and revising these Bank Secrecy Act (BSA) and anti-money laundering and countering the financing of terrorism (AML/CFT) rules is an essential step to protect the U.S. financial system, our communities, and the banks that serve them from illicit finance risk and the bad actors who misuse the U.S. financial system.

We appreciate the many positive steps taken to improve these outdated rules, such as the customer due diligence (CDD) rule exceptive relief order, the suspicious activity reporting FAQs, and the customer identification program (CIP) rule exceptive relief orders, but to ensure the success of the AML/CFT program rule reforms, and actually allow banks to make common sense decisions where to best allocate their compliance resources to combat real illicit finance risk, we respectfully request FinCEN, in coordination with the federal banking agencies, complete the following reforms:

• Finalize a revised AML/CFT program rule supporting a true risk-based approach to protecting the U.S. financial system against illicit finance risk and bad actors;
• Revise the CDD rule and complete beneficial ownership relief;
• Reform BSA reporting rules, including currency transaction reports (CTRs) and suspicious activity reports (SARs); and
• Improve feedback provided to banks.

We stand ready to provide additional information that may be helpful, and to assist in the execution of the priorities identified below.

Download the statement for the record to read the full text.