ABA Recommends Changes to BSA/AML Regulations

In a comment letter to the Treasury department yesterday, ABA provided extensive feedback on several Bank Secrecy Act and anti-money laundering regulations that could be eliminated, modified or streamlined to reduce the compliance burden on banks in response to an executive order issued by President Trump earlier this year.

Emphasizing that the banking industry is committed to combatting terrorist financing and financial crime, ABA recommended a series of changes to improve and modernize the current regulatory regime, including creating an independent “BSA gatekeeper” to oversee and coordinate the BSA regime, taking a priority-focused approach to compliance, increasing the quality of feedback and transparency, streamlining reporting requirements, refraining from criminal sanctions that impose administrative compliance standards and redefining procedures for taking criminal actions against banks.

With respect to the BSA regime, ABA called for a return to basics, with banks identifying and reporting suspicious transactions to law enforcement for investigation rather than conducting investigations themselves. The association also highlighted the importance of an ombudsman to resolve disputes and serve as a single reference point, and of uniform training for bankers and examiners.

ABA further urged Treasury to make it easier for banks to rely on trusted third parties and other financial institutions for customer information, and to refocus the risk-based element in customer relationships to grant additional flexibility to banks. ABA also recommended that Treasury conduct a review of currency transaction reports to determine their utility, and encourage better feedback from law enforcement to help banks better focus their resources. For more information, contact ABA’s Rob Rowe.

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