WASHINGTON — Congress may look to reform illicit financing and money laundering regulations in 2018.
The Senate Banking Committee’s first hearing of the year is titled "Combating Money Laundering and Other Forms of Illicit Finance: Opportunities to Reform and Strengthen BSA Enforcement."
The House Financial Services Committee has also raised the issue of anti-laundering regulations and created a new subcommittee in 2017 devoted to terrorism and illicit finance.
Greg Baer, the CEO of The Clearing House Association, which represents the largest financial firms, is expected to testify at the Senate Banking hearing on Jan. 9 along with former FBI Chief Dennis Lormel and Heather Lowe, head of government affairs at the think tank Global Financial Integrity.
U.S. anti-money-laundering and counter-terror-financing laws derive in large part from the 1970 Bank Secrecy Act and the 2001 USA Patriot Act. But regulations haven’t kept up with technological advances or even inflation, according to experts and industry representatives.
For example, banks are still required to file currency transaction reports for cash exchanges over $10,000, a figure that hasn’t been updated since 1972.
Some members of Congress have also proposed requiring companies to simply report the beneficial owner in the state in which a firm is created. Banks would then be able to access that information when they are doing their due diligence.
The Clearing House also released an extensive report last February recommending a number of reforms after holding symposiums with “60 leading experts” in the field, including senior former and current law enforcement officials, bank regulators, bankers and other thought leaders.