ABA Offers Recommendations for Improving AML Effectiveness, Efficiency

In a letter to the Financial Crimes Enforcement Network today, the American Bankers Association emphasized that “focusing on effectiveness and efficiency in AML compliance programs will go a long way toward eliminating inefficient and unnecessary practices and focus resources on fulfilling the BSA’s stated purpose of providing information with a high degree of usefulness to government authorities.”

ABA’s letter came in response to a recent advance notice of proposed rulemaking aimed at providing banks greater flexibility with respect to the allocation of resources and allowing for the greater alignment of AML priorities across industries and government. In the letter, ABA urged FinCEN to review and update existing regulatory requirements to eliminate redundant, unnecessary or outdated requirements; publish a list of strategic anti-money laundering priorities; and ensure that expectations for an effective compliance program are clear and flexible.

In addition, ABA agreed that it would be appropriate to have a mandate for “all segments of the financial sector” to adopt a risk assessment and urged FinCEN to work towards improving communication between the financial industry and law enforcement.

ABA also joined a group of seven other industry trade groups in a joint letter of support for the proposal. The groups noted that “ultimately, the definition of effectiveness should encourage institutions to move away from their current focus on procedural and technical compliance and towards a principles-based, institution specific approach commensurate with risk,” and offered additional high-level recommendations to guide the rulemaking process.