Regulation

Congress Out To Reform AML Regs

The Senate Banking Committee’s first hearing of 2018 shows that Congress is interested in reforming illegal financing and money laundering regulations this year.

According to American Banker, the committee’s first hearing of the year is titled "Combating Money Laundering and Other Forms of Illicit Finance: Opportunities to Reform and Strengthen BSA Enforcement."

Greg Baer, CEO of The Clearing House Association, is expected to testify at the Jan. 9 hearing, along with former FBI Chief Dennis Lormel and Heather Lowe, head of government affairs at Global Financial Integrity.

While the nation already has anti-money laundering and counter-terror financing laws in place, they were created primarily from the 1970 Bank Secrecy Act and the 2001 USA Patriot Act, respectively. Experts have warned that the regulations haven’t kept up with technological advances or inflation.

One of the reforms proposed by members of Congress would require companies to report the beneficial owner in the state in which a firm is created, enabling banks to directly access that information when performing their due diligence.

The Clearing House, which represents the largest financial firms, suggested a number of reforms last February. These were created after hosting symposiums with “60 leading experts” in the field, including senior former and current law enforcement officials, bank regulators, bankers and other thought leaders.

The House Financial Services Committee has also taken on anti-laundering regulations, creating a new subcommittee in 2017 devoted to terrorism and illicit finance.

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