On January 1, 2021, Congress enacted reforms to the U.S. anti-money laundering (AML) regime. These include Anti-Money Laundering Act of 2020 (AML Act) and, within the AML Act, the Corporate Transparency Act (CTA).
Once past all the pedantic language, two big things stand out: (1) the Bank Secrecy part of the USA Patriot Act is in for some much needed updating; (2) ALMA is going to get the FinCEN pulse racing and that’s going to be a good thing. Now, FinCEN is set to take an even greater leadership role in providing practical, actionable regulation. Which means there’s a shot the bad guys will take some major hits. It can’t happen fast enough.
Many provisions of the AML Act and the CTA require rulemaking and FinCEN seems to be getting on with business. Here a few areas I’m keeping my eye on:
- Establishing national anti-money laundering and countering the financing of terrorism priorities. It will be great to be able to get the local FI in closer harmony with the national perspective.
- Enhancing the whistleblower provisions to provide for a robust whistleblower program and new anti-retaliation protections. I’ve watched too many FIs get away with murder for many years before finally being brought down. Every time there were insiders who knew what was happening but were browbeaten into silence. Why do I care? Because it’s so egregious. And it’s so wrong. And it just continues to legitimize the “entitlement” many of FIs exhibit. So, great, reward the whistleblower from the crook’s ill-gotten gains. What could be better?
- Reviewing, and revising as appropriate, Currency Transaction Report (CTR) and Suspicious Activity Report (SAR) reporting requirements, and other existing Bank Secrecy Act (BSA) regulations and guidance. Yes, some common sense is needed here. Every month a ginormous amount of CTRs and SARs are filed. I’ve heard less than 1% ever get anywhere. Surely in these days of AI something could be done to improve that hit rate. True, there have been some spectacular successes. Just not enough.
For sure, implementing ALMA will not be easy, or inexpensive. But, let’s keep our eyes on the prize here. Anything that makes it harder for the bad guys to corrupt our communities is worth some pain.