Ultimately, what many compliance professionals are asking is, "Do the regulations facilitate the spirit of AML concepts, and enable efficient efforts with regards to time, money and people?"
As written previously, by A&M's Peter Kwan, a bi-partisan bill is making its way up the steps of the United States legislative ladder in an effort to modernize the country’s approach to combating Money Laundering and Terrorist Financing. The bill, H.R. 4373, was first introduced to the 115th U.S. Congress on 11/13/2017 by Rep. Edward R. (R-CA) and Rep. Vicente Gonzalez (D-TX) as the “AML and CTF Modernization Act of 2017.”
Amongst a laundry list of other proposed reforms, the bill calls into question the basis of SAR and CTR reporting requirements by asking the simple question – why haven’t we adjusted the antiquated CTR and SAR reporting thresholds for inflation? This in turn alludes to a broader critique of potentially antiquated regulation and offers an elegant explanation for why we are seeing: (1) excessive false positives for banks, (2) unmanageable filing volumes for FinCEN, and (3) analysis fatigue for the law enforcement & national security agencies that rely on them. With 200 million reports filed to-date and 55,000 new CTR/SAR filings each day, it’s clear that some level of reform, whether it be a course-correction or modernization, is desperately needed.
Bankers often prefer not to complain publicly about complying with AML and counter-terrorism-financing regulations for fear of appearing unpatriotic. But they are also concerned that the millions of suspicious activity and currency transaction reports filed each year don’t amount to much. “The perception is that you send these things and no one even looks at them or analyzes them,” said Merski. “That is very time-consuming and costly and the regulators really come down on hard on your [Bank Secrecy Act] compliance. Bankers are scratching their heads and wondering what it all amounts to.” But Congress could be on its way to the rescue. Combined with new top leadership at the banking regulators, bankers and others in the industry are optimistic changes could be in the offing.