WASHINGTON – The Financial Institutions and Consumer Credit Subcommittee held a hearing today to examine the federal government’s anti-money laundering (AML) efforts under the Bank Secrecy Act (BSA).

June 28, 2017

For Immediate Release | Contacts: Jeff Emerson (202) 226-0471; Sarah Rozier (202) 226-2467

Subcommittee Examines the BSA/AML
Regulatory Compliance Regime

The primary focus of the hearing was to understand compliance challenges facing financial institutions, including compliance trends, the effectiveness of current reporting requirements, and opportunities to improve and enhance the federal government’s ability to combat money laundering and terrorist financing.

"The goals of the Bank Secrecy Act and anti-money laundering (BSA/AML) legal regime are laudable: financial institutions and government agencies should work together to prevent money laundering and terrorist financing. However, aspects of this regulation have spiraled out-of-control and resulted in a breakdown between law enforcement, financial regulators, and institutions. The de-risking seen throughout the financial services space, in part because of BSA/AML regulation, actually increases risk to the system,” said subcommittee Chair Blaine Luetkemeyer (R-MO). “We cannot afford to have an ineffective BSA/AML regime. Today’s hearing is the first step in a series to discuss improvements that could benefit law enforcement and financial institutions – while simultaneously creating a more effective BSA/AML regulatory construct.”

Key Takeaways from the Hearing:

  • The consequences of money laundering are significant to both financial systems and governments worldwide.

  • The Bank Secrecy Act (BSA) and the U.S. economic sanctions regime impose substantial compliance burdens on financial institutions, especially smaller financial institutions with limited staffing and resources.

  • The Federal government has an important mission in combatting money laundering and terrorist financing, but efforts to improve outcomes while reducing unnecessary costs should be considered.

Topline Quotes from Lloyd DeVaux:

“As a community bank, we have seen an influx of new regulations over the past few years as well as additional requirements under old regulations such as the Bank Secrecy Act. Clearly, BSA compliance is an important building block for our national security, but it is founded on principles that were developed nearly 50 years ago. The world has drastically changed since the BSA was adopted in 1970; criminals keep evolving and staying one step ahead of banks and law enforcement. As the United States takes steps to combat terrorism and financial crime, now would be a good time to update the compliance requirements to develop a system suited to the twenty-first century.” – Lloyd DeVaux, President and Chief Executive Officer, Sunstate Bank, on behalf of the Florida Bankers Association

Read the full Lloyd DeVaux Oral Statement to Congress

View the full video testimony