Big US banks to push for easing of money laundering rules

Big US banks to push for easing of money laundering rules
Big US banks to push for easing of money laundering rules

Complying with anti-money laundering rules, including the manpower needed to file suspicious activity reports, costs U.S. companies as much as $8 billion a year, the Heritage Foundation estimated in a report last year.

The Clearing House will propose a new system under which banks do not investigate and report every transaction that could possibly raise a red flag, according to people involved in the effort.

Instead, banks would focus on investigating and reporting transactions based on specific concerns relayed to them by law enforcement. Under this approach, banks could shift their focus, as law enforcement priorities change.

Institutions in different parts of the country may also watch out for certain types of criminal transactions, based on information from authorities. For example, law enforcement could warn banks in the southwest of the United States to look out for drug traffickers moving funds to Mexico, according to people involved in drafting the proposal.

The Clearing House will also call for the creation of an information-sharing platform that would allow banks to share data among themselves about possible criminal transactions.

For international banks, the group will push for the U.S. Treasury's FinCEN to be responsible for investigating compliance, rather than the Office of the Comptroller of the Currency, a main bank regulator.

Since FinCEN is already responsible for sharing threat data with law enforcement agencies, the agency will be better able to determine if banks are making a substantial contribution to law enforcement efforts, the bank group will argue.

'New set of eyes'

It remains to be seen what kind of reception such a proposal will get from U.S. law enforcement officials and regulators, who have spent years learning how to turn SARs into leads for fruitful investigations.

A FinCEN spokesman pointed out dozens of criminal cases made with the help of SARs listed on the agency's website. The spokesman said the agency is unable to collect comprehensive statistics on how often SARs lead to successful prosecutions.

Even if controls were loosened at the federal level, state regulators such as the New York Department of Financial Services may not let banks alter course. Just last month, the New York regulator imposed a new anti-terrorism regulation requiring banks to beef up suspicious activity reporting.

The New York regulator declined to comment for this story.


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