In testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, FinCEN, Office of the Comptroller of the Currency ("OCC") and FBI officials described efforts to improve the Bank Secrecy Act ("BSA") / Anti-Money Laundering ("AML") regulatory and supervisory regime.
FinCEN Director Kenneth A. Blanco emphasized the importance of information obtained through BSA compliance requirements. He said that such information helps FinCEN to (i) ensure the protection of the financial system from exploitation by illicit actors or financial institutions with broken controls, (ii) provide financial institutions with information about suspicious behavior related to money laundering and terrorist financing threats and (iii) aid investigations tied to weapons trafficking and other crimes.
Mr. Blanco added that components of FinCEN's efforts to improve the BSA regime include:
- using artificial intelligence and machine learning to analyze the data;
- sharing information with the private sector to help identify suspicious activity; and
- developing new ways to provide feedback to financial institutions on the value and benefits of reporting.
OCC Compliance and Community Affairs Senior Deputy Comptroller Grovetta N. Gardineer testified that artificial intelligence and machine learning provide opportunities to cut costs and better spot criminal activity. She recommended that Congress consider legislation that would:
- require regular review of BSA/AML regulations to identify those that might be outdated or burdensome; and
- amend the BSA's safe harbor rules to clarify that a financial institution can file a suspicious activity report without being exposed to civil litigation, and that information sharing between financial institutions will not incur liability.
FBI Criminal Investigative Division Section Chief Steven M. D'Antuono testified that criminals use opaque corporate structures to hide the true beneficial owners of assets. He identified the Treasury Department's recent Customer Due Diligence Rule as one step taken in response to that challenge.
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