Newsroom

Rep. Carolyn Maloney, D-N.Y., touted benefits of her bill that would help financial institutions comply with the Financial Crimes Enforcement Network's (FinCEN) customer due diligence (CDD) rule at a NAFCU-attended event hosted by the Brookings Institute this week. The event also featured a panel of experts who discussed a number of Bank Secrecy Act (BSA)/anti-money laundering (AML) issues.

The panel featured J.W. Verret, a law professor at George Mason University, Karen Gifford, former COO of Ripple Labs, Rodgin Cohen, senior chairman at Sullivan & Cromwell LLP, and Juan Zarate, chairman and co-founder of the Financial Integrity Network and a former deputy national security advisor. NAFCU Regulatory Affairs Counsel Kaley Schafer and Associate Director of Legislative Affairs Sarah Jacobs attended the event.

In her comments, Maloney – a member of the House Financial Services Committee – noted that the U.S. is currently the easiest country to open a shell corporation due in part to state laws that do not require businesses to disclose beneficial owners. Her bill, the Corporate Transparency Act (H.R. 2513), would require companies to disclose their true beneficial owners to FinCEN and the information would then be used to create a database of beneficial ownership information that would be available to law enforcement agencies and financial institutions.

Maloney said the bill would decrease regulatory burdens for financial institutions, adding that it requires basic information that should not be difficult or time consuming to report. NAFCU supports the bill, and Maloney specifically mentioned support from credit unions. She addressed some concerns about the bill, as did the panel of experts in their discussion.

Looking at the entire BSA/AML regime, the panelists indicated that information sharing between financial institutions, law enforcement, and regulators could be strengthened. They also were concerned about some legitimate individuals and businesses not being able to access financial services because of false positives in reporting.

The panelists also addressed BSA/AML concerns related to marijuana banking due to conflicting state and federal laws. Earlier this week, NAFCU's Congressional Caucus featured a panel on this issue.

The panel ended with suggestions to improve the BSA/AML system, including offering incentives for whistleblowers, expanding FinCEN's information-sharing programs to foreign governments (NAFCU has suggested improvements to these programs as well), and providing a safe harbor for financial institutions to experiment with AML practices such as behavioral analysis.