At 50-years-old, the Bank Secrecy Act (BSA) still serves a vital purpose for the United States financial system: protecting its individual members from being used to finance illegal activity. But its ability to achieve that purpose has not kept pace with an ever-evolving world.
In fact, the sponsors of the BSA would barely recognize today’s financial system or global economy—they are so thoroughly different from what they were in 1970. Even so, the law remains largely unchanged except for a handful of updates, including the USA PATRIOT Act, which brought more industries under BSA jurisdiction.
The resulting tug-of-war between regulatory agencies charged with examining and enforcing BSA compliance and the financial institutions required to comply with the law in a vastly different world continues to move in a positive direction. Consensus on the need to modernize BSA/AML compliance is growing.
The Financial Crimes Enforcement Network (FinCEN) recently published the latest proof of this consensus in an advance notice of proposed rulemaking (ANPRM) on Anti-Money Laundering Program Effectiveness. The ANPRM also speaks to a growing partnership between the financial services industry and federal financial regulatory agencies.
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