WASHINGTON - In the wake of a Senate investigation that found that several prominent U.S. banks failed to deter money laundering through correspondent accounts, two Senate and House Democrats have introduced legislation that would mandate tighter scrutiny of accounts by the industry.

The measure would let the Treasury Secretary issue informal advisories to U.S. banks about suspicious nations and even prohibit them from operating overseas correspondent accounts with foreign institutions the agency deems to be of "primary money-laundering concern."

U.S. banks would have to maintain records or report on their foreign operations and identify foreign individuals who own or have access to domestic accounts. The bill would also allow the Treasury to prohibit or impose restrictions on U.S. banks' correspondent accounts with certain foreign financial institutions.

The bill was introduced Tuesday by Rep. John J. LaFalce of New York, the top Democrat on the House Financial Services Committee, and Sen. John Kerry, D-Mass., a member of the Senate Banking Committee.

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