Banks Push to Restructure Anti-Money Laundering Rules

February 22, 2017, Written By John H. Oldshue

The Clearing House, an association that represents major banks in America, recently published a report detailing the problems with current anti-money laundering laws in the United States and what could be done to resolve them. In short, the group aims to loosen regulations put in place after September 11, 2001 because they are too costly and ultimately less effective than other tactics.

Between April and October 2016, a group of 60 law enforcement, security and financial experts worked together to assess problems with the AML/CFT (anti-money laundering/countering the financing of terrorism) regime. In their report, the group said “a redeployment of [AML/CFT] resources has the potential to substantially increase the national security of the country…and enhance the ability of the country to assist and influence developing nations.”

The group held two separate meetings over the year, one to identify problems and one to come up with solutions. Some of the key problems outlined in the report include:

  • Improper prioritization of financial intelligence. Under the existing regulations, banks often focus on “more readily auditable processes” instead of examining the “real risks.”
  • Outdated regulations for suspicious activity reports (SAR). The Clearing House believes there are technical resources that can be used to gather financial data necessary for SARs, but the current policies require more time-consuming methods of sending leads to law enforcement.
  • Limited motivation for innovation. Financial institutions receive almost no incentives for updating their methods of identifying criminal behavior, which also reduces their potential cooperation with law enforcement.
  • Inefficient information sharing. Present regulations do not allow for easy and efficient information sharing among financial institutions, or between banks and law enforcement agencies.
  • Improper allocation of resources. Much of the time and money devoted to AML/CFT activities could be repurposed to better help both the banking industry and law enforcement.

The proposed solutions for these problems were quite expansive. Many of these suggestions include increased government involvement in AML/CFT policies to alleviate pressure from the banks. The Clearing House suggests adjustments in the responsibilities of the Department of Treasury, the Financial Crimes Enforcement Network (FinCEN), and the Office of Terrorism and Financial Intelligence (TFI), as well as changes to the USA PATRIOT Act and other financial regulations.



The information contained within this article was accurate as of February 22, 2017. For up-to-date
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About John H. Oldshue

John Oldshue is the creator of LowCards.com. He worked for over 15 years in television and won an Emmy award for his reporting. He covers credit card rate issues for LowCards.com.
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