US Banks Pushback Against Burdensome Money Laundering Regulation

Some of America’s largest financial institutions are uniting to propose a complete overhaul of what they argue are burdensome, onerous and ineffective regulations implemented by George Bush (after the 9/11 attacks) and strengthened by to fight money laundering. The rules oversee how investigations and reports of potential criminal activity are done, but major banks are arguing they are counter effective.  , a trade association that represents the largest banks in America, including , and Citigroup, has spoken on the issue for several years, but this marks the first time they are publicly calling for a repeal and replace.

Sources close to the matter have reported a replacement proposal could be published by next week, which will likely mark an intense lobbying effort aimed at bank regulators and Congress (especially those on the Senate and House finance committees) to get the reforms pushed through as soon as possible. With the President already indicating his intent to streamline the economy as much as possible by cutting regulations, he has made clear to the public that he is for common sense form to help put Americans back to work and money in their pocket. In an effort to keep drug cartels and terrorist networks from laundering money through the US financial system, federal law mandates that all bank and financial employees complete a Suspicious Activity Report (SAR), and submit it to the relevant authorities when completing transactions that raise red flags.

After being hit with overwhelming amounts of penalties over the past few years over the failure to alert authorities to criminal activities, banks claim they have been forced into over-reporting, submitting hundreds of thousands of due to the fear instilled by the overreaching regulations.  They argue that when they are forced to submit for every little thing, big thing can be drowned out in the mix and missed by regulators, making their job more difficult.  Since 2013 the number of jumped from about 670,000 to nearly one million in 2016, per the US Treasury’s Financial Crimes Enforcement Network – the department responsible for enforcing anti-money laundering rules and tracking key performance indicators on the governments success rate in stopping it.

The collection of banks cited a Heritage Foundation to make the case that the anti-money laundering overbearing rules are currently costing US corporation as much as $8B per year – money which could be used to employ Americans in high quality jobs.  The Clearing House is expected to suggest a new system that doesn’t investigate and report every incident they believe could be potential criminal activity, but only report incidents they believe are likely to be potential criminal activity.  It would also allow certain geographic areas to target certain types of criminal activity, for example, suggesting banks in the south west be on the lookout for Mexican Drug Cartels.  Additionally, they are calling for an information sharing platform that would allow banks to share relevant data with each other about possible criminal activity.

Tel: 1 (888) 861-5455
Email: info@dynamiccap.com

2455 East Sunrise Blvd
Suite 411
Fort-Lauderdale, Fl 33304

Office

Hours

  • Mon - Fri9:00 AM - 6:00 PM
  • Sat9:00 AM - 2:00 PM
  • SunClosed
  • HolidayClosed

© 2018 Dynamic Capital