U.S. Compliance Laws Need to Strengthen

Money laundering is a major problem rising within the United States and the current laws are just not enough to be effective in preventing this issue.  Recently, Senator Elizabeth Warren put her support on the Senate floor for stricter anti-money laundering (AML) and compliance laws because she believes that most of them are outdated and need to be refurbished for our current economic system.  Warren specifically called for more stringent requirements for company ownership disclosure as well as a change of the reporting threshold for suspicious transactions in an effort to help small lenders and law enforcement fight this growing threat.

The Bank Secrecy Act (BSA) was written in 1970 to establish what rules must be applied by financial institutions, however since this was enacted, the technology in the United States has expanded more than ever before and will continue to grow to even higher advancements.  Further, technology has allowed for due diligence systems to develop in new ways such as identification, training, internal controls, and Know-Your-Customer (KYC).  Due diligence programs allow financial institutions to manage their companies compliantly and prevent illicit transactions or activities.

According to the Senate Banking Committee, the U.S. State Department of Justice and other regulators collectively fined over $16 billion for AML non-compliance since the end of 2009.  Updating laws to be more specific to today’s technological advancements would enable financial institutions to promote better compliance with AML laws.

Moreover, the USA Patriot Act of 2001 was signed into law in the hopes of preventing terrorist attacks and has strengthened the BSA through the implementation of AML software, identification and detection programs for suspicious activity, and mandatory reports on suspicious transactions.  However, even with these applications, money laundering has not been deterred enough, proving that even more stringent laws need to be implemented and enforced.

In a discussion regarding creating new AML and compliance laws, the Senate came to the consensus that enforcing more stringent counter terrorist financing laws, more accurate and consistent reports on company activities, and information sharing that allows banks to have a closer insight on who they are working with are all necessary improvements that should be put into effect.

Overall, with money laundering activity increasing, the United States needs to take action in order to prevent it from wreaking havoc on our growing economy and advancing society.  As the Senate committee hearings continue, money laundering will continue to be a key issue discussed.


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