Giving thanks for proportional regulations
It is difficult to write a column for a global audience and make an analogy that can be understood by all audiences around the world. In the United States, we are about to celebrate Thanksgiving. I considered making a reference to it here, but with some research, I quickly realized not all countries celebrate this holiday and the reference will probably get lost in translation. Australia, Brazil, Grenada, Liberia, Netherlands (one city), Philippines and St. Lucia have similar celebrations, but not necessarily on the same day. Other countries have “harvest” festivals that are similar, also with differing origins and times. So, making a reference to Thanksgiving really does not work for the entire audience of this newsletter.
It really reminds me of financial institution regulations. Not all of them work for all types of financial institutions. This is why WOCCU regularly emphasizes including “proportionality” in almost all international standards, so that regulations can be tailored to the size, risk and complexity of a credit union.
To that end, I urge you to watch our recent webinar put on by WOCCU’s COVID-19 Response Committee where representatives from the Financial Action Task Force discussed anti-money laundering (AML) risks. There is a good discussion on how AML/CFT regulations at the international level include flexibility within the framework so that these requirements can be tailored for credit unions. Also, look at the recent amendments from FATF on proliferation financing (story below). It includes direction from FATF to apply measures proportionate to the risk of the relevant institutions as well as financial inclusion guidance.
Here’s to a happy holiday season for all of us—and more streamlined regulations in 2021.
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