NYU Law Compliance and Enforcement Blog
Marc-Alain Galeazzi, Barbara Mendelson, and Malka Levitin authored an article that was republished in NYU Law’s Compliance & Enforcement blog, covering the Financial Crimes Enforcement Network’s (FinCEN) request for comments on how to improve the effectiveness of anti-money laundering (AML) programs that financial institutions are required to have in place under the Bank Secrecy Act (BSA).
“There is no ‘one-size-fits-all’ AML program, and, in order to be effective, each financial institution’s program must be risk-based and commensurate with the specific risks such institution faces,” the authors wrote. “It will be difficult for FinCEN to strike the right balance for finding a clear and concise definition for ‘effectiveness’ and an ‘effective and reasonably designed’ AML program, on the one hand, and, on the other hand, to avoid the risk that financial institutions turn to a ‘check-the-box’ mindset when establishing or adjusting their AML programs. However, FinCEN acknowledges…that financial institutions vary considerably in business models and risk profiles, even within the same category of institution. With responsive information from the industry, FinCEN should be able to fashion any future regulatory requirement for an ‘effective and reasonably designed’ AML program to provide enough flexibility for individual financial institutions to appropriately address their particular risks and at the same time provide much-awaited guidance on the specific requirements for such an AML program.”
Read the full article.