Committee chair cites ‘clear bipartisan interest’ in modernizing BSA/AML; witness echoes call

Modernizing the Bank Secrecy Act (BSA) and anti-money laundering (AML) regime has “clear bipartisan interest,” the chairman of the Senate Banking Committee said Wednesday in opening a hearing, where he called for coordination and information sharing among all stakeholders.

“There seems to be space to improve information and coordination between industry, regulators, and law enforcement,” said committee Chairman Mike Crapo (R-Idaho). “The breadth of each of these areas merit further consideration and discussion.”

Crapo said a hearing held last week by the committee highlighted a need to work with bank examiners to ensure that AML compliance “is not just a ‘check-the-box’ exercise.” He noted that while technology now provides new ways to catch criminals and facilitate compliance, it also poses challenges to law enforcement. He pointed to the rise of cryptocurrencies and their potential to facilitate sanctions evasion “and perhaps, other crimes.”

Testimony at the Senate committee’s Wednesday hearing (titled “Combating Money Laundering and Other Forms of Illicit Finance: Administration Perspectives on Reforming and Strengthening BSA Enforcement”) included that from a Treasury official who called for increasing the transparency and accountability of the U.S. financial system. “A strong and effective AML/CFT [counter financial terrorism] framework keeps illicit actors out of the financial system, and allows us to track and target those who nonetheless slip through,” said Sigal Mandelker, Treasury under secretary, terrorism and financial intelligence. “This framework must address the evolving forms of illicit finance threats that we face.”

Mandelker told the senators that the Treasury Department is taking “a hard look” at both BSA and the broader AML/CFT regime. “We need to continuously upgrade and modernize our system – a statutory and regulatory construct originally adopted in the 1970s – and make sure that we have the right framework in place to take us into the 2030s and beyond,” he said.

Senate Banking Committee: Combating Money Laundering and Other Forms of Illicit Finance: Administration Perspectives on Reforming and Strengthening BSA Enforcement

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