Federal regulators are scheduled today to propose new money-laundering rules designed to ensure that banks verify the identity of their customers.
Bankers have been waiting for these so-called "know your customer" rules since May 1996. The Federal Reserve Board plan due Thursday is expected to be relatively flexible, requiring banks to establish systems to catch money launderers, but not mandating the system's structure. "I think it will be very flexible regarding what the regulation will require, so a lot will be left to bankers' discretion," predicted John J. Byrne, senior counsel at the American Bankers Association. All the banking agencies are expected to issue the proposal eventually.