Treasury, in report, says BSA/AML rules being reviewed for improvement

Above are the counts of Treasury rules eliminated/proposed to be eliminated or reduced. For BSA/AML, one rule “reduction” is expected, other rules are under review.

A report Tuesday from the Treasury Department points to the elimination or proposed elimination, and reduction, of more than 300 rules since the department commenced work to implement the president’s regulatory reform agenda as detailed in several executive orders issued early last year. That work continues, the report says, and it includes a review of the government’s Bank Secrecy Act/anti-money laundering (BSA/AML) rules – specifically, how to ease some of those rules while preserving the ability to gain needed intelligence about criminal activity and terrorist financing.

The Treasury report, “Regulatory Reform Accomplishments Under President Trump’s Executive Orders,” says public comments following a request for information last June regarding two of the president’s executive orders included a “significant” number of suggestions for changes in the BSA/AML rules, which are set by the Financial Crimes Enforcement Network (FinCEN). It says FinCEN is reviewing these rules to identify which ones might be outdated “and in need of modernization.”

“Public comments,” the report says, “have reflected a variety of concerns in this area – for example, some banks are concerned that they are allocating significant resources to filing what could be low value Suspicious Activity Reports (SARs) at the expense of more valuable activities.

“At the same time, FinCEN must weigh regulatory burdens against the critical need for financial intelligence to address threats posed by evolving forms of illicit finance.” It notes particularly the efforts of terrorist groups seeking to “infiltrate” the financial system to support their activities. “Transnational criminal organizations, drug kingpins, cyber criminals and others likewise seek out vulnerabilities in the global financial system, including by looking to use emerging technologies such as virtual currencies to launder their ill-gotten gains and advance their malicious enterprises,” it says.

FinCEN and other components of the Office of Terrorism and Financial Intelligence (TFI) are all working with stakeholders to ensure the efficient use of regulatory resources, it continues. “In particular, TFI seeks to make sure that financial institutions are devoting their resources toward high value activities and are encouraged to innovate with new technologies and approaches so that Treasury and law enforcement are able to better address illicit finance threats.”

So far, Treasury has identified one “burden-reducing” FinCEN regulation in its fall 2017 unified agenda of regulations. The “Reports of Foreign Financial Account (FBAR)” rule, which Treasury says it plans to finalize, will clarify which persons will be required to file FBAR reports and what information is reportable, “with the goal of achieving statutory objectives at a lower cost.”

The 21-page report also recaps activities of the past year regarding tax regulation, bank and credit union regulation, reform for the Consumer Financial Protection Bureau (CFPB), and activities of the Financial Stability Oversight Council (FSOC).

Treasury Releases Report Highlighting Regulatory Reform Accomplishments