The House of Representatives passed, by a voice vote, a bill designed to reform the Bank Secrecy Act ("BSA") and anti-money laundering ("AML") laws.

Specifically, the COUNTER Act (H.R. 2514) is intended to strengthen the effectiveness of anti-money laundering authorities by:

  • expanding the defined purpose of the BSA to include safeguarding the integrity of the international financial system;
  • increasing the administrative budget for the International Monetary Fund to provide AML technical assistance;
  • creating additional Treasury attaché positions overseas that are focused on AML issues;
  • adding FinCEN domestic liaisons to improve regulatory cooperation;
  • establishing a FinCEN Exchange Program to facilitate information sharing between law enforcement, financial institutions and FinCEN;
  • conducting studies and implementing strategies to address trade-based money laundering, de-risking and Chinese money laundering; and
  • requiring an examination of Treasury's delegation of regulatory authority under the BSA.

The bill would also aim to modernize the AML system by, among other things:

  • establishing a pilot program under which financial institutions are permitted to share suspicious activity reports (or "SARs") with foreign affiliates;
  • requiring FinCEN to share money laundering threat patterns and trends with financial institutions;
  • providing new sources for monetary rewards to whistleblowers who identify violations of the BSA;
  • further dissuading repeat offenders under the BSA;
  • incentivizing financial institutions to pursue innovative approaches to BSA compliance;
  • creating innovation labs within the Treasury and each Federal functional regulator; and
  • requiring FinCEN to conduct a study into the internal use of emerging technologies.

Commentary

There is an appetite in Congress for BSA reform. The COUNTER Act (H.R. 2514), described above, and the Corporate Transparency Act (H.R. 2513), which would require beneficial owners to be identified to FinCEN, have both passed the House. In the Senate, the ILLICIT CASH Act (S. 2563), which is largely similar to the two House bills, has been introduced. The three bills have bipartisan support, but they have yet to be consolidated. Nonetheless, the overarching themes of the AML bills are clear: 1) FinCEN must provide more useful feedback and guidance to financial institutions; 2) whistleblowers and innovative compliance tools are welcome; 3) repeat offenders are not; and 4) effective AML requires more international capacity and cooperation. The ultimate question is when, not if, a consolidated version of these bills will become law.

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