Tom Cotton Senator The View from DC - Bankers Assurance
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Senator The View from DC
Tom
Cotton
Kyle Hauptman
Office of Senator Tom Cotton
March 2020
Cannabis Banking
• Last September, the SAFE Act easily passed the House, 321-103
• In December, Senate Banking Chairman Crapo put out a 2200-word statement
focused on public health and money-laundering concerns; any bill requires his OK.
o Crapo recognized the issues facing “ancillary service providers”
o He also stressed updating the 2014 FinCEN guidance
• ICBA and ABA replied with comments largely supportive of the SAFE Act
Misaligned Incentives: Why Our AML System Is Expensive Yet Ineffective
1. The costs and benefits are borne by different parties.
Who pays the costs? Who gets the “benefits?”
Financial Institutions: FinCEN has no incentive to reduce the Law
Treated as outsourced law data collection burden, since FinCEN enforcement:
enforcement doesn’t have to collect the data. • DOJ
• FBI
Data • TFI
2. Making things worse, the financial institutions & FINCEN aren’t communicating directly about the AML
regime’s structure. Between them sit the prudential regulators, who examine lenders’ AML compliance
but aren’t incented to either streamline the AML process or better catch criminal activity.
Prudential regulators
• Federal Reserve
Financial Institutions • OCC
Banks Exams Law
• FDIC enforcement:
• NCUA • DOJ
• FBI
Banks Send Data but Don’t Give Nor Get Feedback • TFIThe ILLICIT CASH ACT (ICA)
• The bill (S. 2563) addresses AML Reform and Beneficial Ownership
• Introduced in Sept. 2019 by eight Senators, 4R/4D; now 5R/5D
• Current status: Being negotiated by Senate Banking Cmte leaders
• Next steps: 1) A ‘markup’ (vote) in Banking Committee
2) Vote on Senate floor
3) Vote(s) in House of Representatives
4) Signed by President Trump
Related Bills in the House: Corporate Transparency Act & COUNTER Act
• The issues addressed by ICA were split into two bills in the House
1) The Corporate Transparency Act addressed beneficial ownership;
was controversial, with only 25 of 199 GOP members in favor
2) The COUNTER Act is AML reform; uncontroversial
• Going forward, the likeliest path is for the House to vote on ICA if/when the
Senate passes itWhat’s in the ILLICIT CASH ACT?
• Modernizes the Bank Secrecy Act; first real update since 1970
• Requires routine communication and feedback to financial institutions
• Treasury to coordinate risk-based approaches i.e. purpose is to reduce
illicit finance, not to produce lots of SARs/CTRs
• FinCEN liaison created to seek and receive feedback on rules, regs,
exams
• Banks can de-identify SAR-info and share it with other banks, affiliates
• Law enforcement must give Treasury annual metrics on data from banks
o This report should give prospective feedback on AML trends
• Update definition of ‘coins and currency’ to include digital/crypto currency
• Beneficial ownership: Create a FinCEN database of real human owners
o BO database should eliminate the superfluous CDD procedures
o Bank customers can more easily shop around for services
o Businesses may list an entities’ ”FinCEN ID” as an owner, unlike CDD
o The database will greatly add in combatting illicit financeYou can also read
