December 18, 2019

Thaler to Senate Banking: Advance BSA/AML legislation

capitolNAFCU Vice President of Legislative Affairs Brad Thaler Tuesday shared the association's support of S. 2563, known as the ILLICIT CASH Act, in a letter to the Senate Banking Committee. NAFCU has actively sought Bank Secrecy Act (BSA)/anti-money laundering (AML) regime improvements and relief for credit unions, and previously shared its support for the House-passed COUNTER Act.

The association also discussed recent BSA/AML-related regulatory relief efforts in an October meeting with the Financial Crimes Enforcement Network's (FinCEN) Office of Regulatory Policy.

"Credit unions support efforts to combat criminal activity in the financial system," wrote Thaler. "Our members have a good working relationship with FinCEN, and they consistently inform us that the publication of periodic BSA/AML guidance is very helpful."

Thaler also urged the committee to schedule a markup in efforts to reform and improve BSA/AML requirements, highlighting that current requirements continue to be a burden to implement for credit unions.

In the letter, Thaler outlined specific provisions of the legislation that would help credit unions to effectively implement requirements, including:

  • the establishment of AML programs and FinCEN as a financial institution liaison;
  • improvements to AML/CFT (Counter Financing of Terrorism) oversight, communication, and processes;
  • modernization of AML/CFT system; and
  • beneficial ownership disclosure requirements.

Additionally, Thaler detailed three suggestions for how the bill could be improved: Enhance training for examiners on AML/CFT issues, index the thresholds for CTRs and suspicious activity reports for inflation, and create opportunities for technical grants or training to help "assist with the cost of software of technological capabilities."

"Small, community institutions stand to benefit the most from new technology in this area, as it would reduce the number of man-hours involved with BSA compliance," wrote Thaler. "Such a move would be in direct alignment with FinCEN's objectives, as training and technological subsidies would enable more credit unions to have robust BSA/AML procedures in-place, thereby furthering FinCEN's goals."

Last year, NAFCU witness John Lewis spoke on the need for further guidance on regulators' risk-management expectations and the need for further guidance on risk management and de-risking.