How the “customer due diligence” rule (which took effect for compliance on Friday) advances the effectiveness of anti-money laundering and combatting the financing of terrorism is the focus of a Wednesday hearing in the House.
The hearing in the terrorism and illicit finance subcommittee will have one witness: Kenneth A. Blanco, director of the Treasury’s Financial Crimes Enforcement Network (FinCEN), according to a memo published by the subcommittee late Friday.
In addition to looking at the rule’s impact on money laundering and terrorism financing, the memo notes, the subcommittee will also look at the agency’s implementation and enforcement of the rule.
Even though financial institutions are, as of last Friday, required to be in compliance with the rule (known by the acronym “CDD”), the subcommittee memo asserts that as the compliance implementation date approaches, “there remain, however, significant questions about the CDD Rule’s interpretation and reporting requirements.”
“With any new rule, law enforcement should also provide financial institutions with flexibility, clear guidance and consistent feedback,” the memo states.