Treasury’s Reports Identify Key Illicit Finance Threats and Concerns; HMDA Reference Chart
Written by Shari R. Pogach, NAFCU Regulatory Paralegal
In December, the United States Department of the Treasury (Treasury) released the National Strategy for Combating Terrorist and Other Illicit Financing, pursuant to Sections 261 and 262 of the Countering America’s Adversaries Through Sanctions Act of 2017. This report addresses the threats and risks to the U.S. financial system as identified in three separate risk assessments: 2018 Terrorist Financing Risk Assessment; 2018 National Proliferation Financing Risk Assessment; and 2018 National Money Laundering Risk Assessment. The terrorist financing and money laundering risk assessments build and expand on previous risk assessments issued in 2015. The reports were prepared by the Office of Terrorist Financing and Financial Crimes, an office within Treasury’s Office of Terrorism and Financial Intelligence, in consultation with the many agencies, bureaus, and departments of the federal government involved with combating illicit finance.
According to Treasury’s strategy report, U.S. financial institutions process trillions of dollars of transactions both domestically and globally on any given day. The stability and transparency of our financial system make it an attractive target for unlawful financial activity such as fundraising by terrorist groups and their associates; financial transactions that help those participating in the proliferation of weapons of mass destruction; and money laundering by drug-trafficking organizations, organized crime groups and those committing fraud.
The strategy report discusses and assesses current efforts to combat threats and also identifies priorities, objectives and potential areas for future improvement. It highlights enforcement activity and improvements in information sharing tools and updated guidance to help financial institutions in detecting and combating illicit finance threats.
Treasury’s report indicates that along with its interagency partners, it is working to identify ways to improve the existing anti-money laundering and countering the financing of terrorism (AML/CFT) safeguards. This includes a Bank Secrecy Act (BSA) federal banking agencies working group on BSA/AML that is exploring ways to modernize the regulatory regime so financial institutions can devote resources to addressing areas of highest risk. In addition, the BSA advisory group, chaired by the Financial Crimes Enforcement Network, consisting of members from financial institutions, trade groups and law enforcement, is also looking for feedback on ways to improve the BSA framework. Treasury is also reaching out to financial institutions and businesses in the FinTech and regulatory RegTech sector in order to understand and assess the potential of technological innovations coming to market.
Yesterday, the Consumer Financial Protection Bureau (CFPB) released a regulatory and reporting overview reference chart for HMDA data collected in 2019. It’s meant to be used as a reference tool for the data points required to be collected, recorded and reported under Regulation C. It includes all recent amendments and relevant regulation and commentary sections are also provided.