Fewer reports and a more robust federal e-filing system would bolster U.S. anti-money laundering and counter-terrorism efforts, according to new report from The Clearing House. The bank association, which based its findings on feedback from about 60 experts, said that while the largest financial institutions collectively spend billions of dollars annually to prevent money from being laundered or reaching terrorists, those efforts have “limited law enforcement or national security benefit.”
That’s in part because the suspicious activity reports (SARs) that banks send to the U.S. Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, “may never be read” despite the “significant time and energy” spent crafting those reports. The banking group recommends that FinCEN instead overhaul its e-filing system so that banking authorities can send in raw data, which, the report said, could be done without violating privacy standards. Sending in such data instead of spending time writing reports also would free up time for the banks’ AML investigators to focus on monitoring developing threats and client relationships.
The report also called for more information sharing among financial institutions and between banks and law enforcement, and for FinCEN to “reclaim sole supervisory responsibility for large, multinational financial institutions that present complex supervisory issues.” More than 20 years ago, FinCEN ceded supervisory authority over Bank Secrecy Act compliance to the federal banking agencies while retaining enforcement authority, according to the report.
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