Pub. 17 2020 Issue 4

22 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S — H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S W hen Congress pushed through the National Defense Authoriza- tion Act for the fiscal year 2021, the bank- ing industry breathed a sigh of relief with the glimmer of hope for the poten- tial elimination of excessive regulatory burdens under the Bank Secrecy Act. The reason for hope is the section within the legislation dedicated solely to improvements to anti-money laundering rules, including to: • Improve coordination and information sharing among the agencies tasked with administering anti-money laundering and coun- tering the financing of terrorism requirements, the agencies that examine financial institutions for compliance with those require- ments, Federal law enforcement agencies, national security agencies, the intelligence community and financial institutions; • Modernize anti-money laundering and countering the financing of terrorism laws to adapt the govern- ment and private sector response to new and emerging threats; • Encourage technological innovation and the adoption of new technology AML/BSA REFORM IS ON THE HORIZON by financial institutions to more effec - tively counter money laundering and the financing of terrorism; • Reinforce that the anti-money laun - dering and countering the financing of terrorism policies, procedures, and controls of financial institutions shall be risk-based; • Establish uniform beneficial owner - ship information reporting require- ments to: ◦ Improve transparency for na- tional security, intelligence, and law enforcement agencies and financial institutions concerning corporate structures and insight into the flow of illicit funds through those structures; ◦ Discourage the use of shell cor- porations as a tool to disguise and move illicit funds; ◦ Assist national security, intel- ligence, and law enforcement agencies with the pursuit of crimes; and ◦ Protect the national security of the United States; and • Establish a secure, nonpublic database at FinCEN for beneficial ownership information. The main purpose of this immense undertaking will continue to focus on safeguarding the United States financial system and those financial institutions that make up that system from the abuse of money laundering, terrorist financing and other illicit financial crimes. Today, banks must develop and implement an effective risk-based AML program consistent with rules that transcend roughly 50 years of bank- ing. Over that time, many things have changed, especially the recent digital innovations relating to how consum- ers interact and conduct their banking and transactions. Unfortunately, the same cannot be said for the regulatory burden to file reports under archaic and arbitrary thresholds. Under the current BSA Currency Transaction Reports (CTRs) require - ments (not considering exemptions as they are a burden unto themselves), financial institutions must report currency transactions over $10,000 conducted by or on behalf of, one By Steve Manderscheid, Compliance Alliance