Newsroom

NAFCU last week joined with 11 other financial industry trades in supporting draft legislation that would modernize and clarify provisions related to the nation's anti-money laundering, countering the financing of terrorism (AML/CFT) regime.

The trade associations sent a joint letter to Reps. Steve Pearce, R-N.M., and Blaine Luetkemeyer, R-Mo., regarding their draft bill, the Counter Terrorism and Illicit Finance Act, which would target anonymously owned shell companies that launder money by cloaking the identities of their beneficial owners from law enforcement.

In the letter, the associations say they support the bill because it would allow financial institutions access to information, aiding in customer due diligence compliance efforts. Small businesses must soon provide such information to their banks and other financial institutions under the Financial Crime Enforcement Network's (FinCEN) customer due diligence (CDD) rule.

"The draft bill appropriately coordinates the definition of beneficial ownership with FinCEN's rule," the letter states. "It is our hope that this will help reduce the anticipated burden of complying with the requirements of the CDD rule. Financial institutions should be able to rely on the information reported by businesses to FinCEN, which would, in turn, reduce the reporting burden on those businesses."

In addition to the beneficial ownership language, the trades write that they are supportive of the bill's provisions to help clarify the complex regulatory reporting structure by requiring the Treasury Department secretary to:

• set national priorities for the AML/CFT regime;
• facilitate information sharing and feedback between financial institutions and law enforcement; and
• encourage the use of technology and artificial intelligence within financial institutions' anti-money laundering programs.