With the 2021 change in administration in Washington, D.C., the anti-money laundering (AML) regulatory climate has already seen significant impacts. On January 1, 2021, the Senate voted into law the National Defense Authorization Act (NDAA). Within the NDAA, the Anti-Money Laundering Act of 2020 (AMLA) became law and amends the Bank Secrecy Act (BSA) for the first time in nearly two decades. The BSA, adopted in 1970, has not had a significant overhaul since the USA PATRIOT Act (commonly known as the Patriot Act) in 2001 in response to the September 11 terrorist attacks on the United States. AMLA is significant in U.S. anti-money laundering laws and priorities, and financial institutions must be prepared for the changes.
The Financial Crimes Enforcement Network (FinCEN) and other regulatory bodies have long understood the need to re-adjust and streamline AML priorities. The passing of AMLA signals that Congress is paying attention. AMLA encourages a strengthened partnership between law enforcement and financial institutions, using scarce resources more effectively. The intention of the BSA has always been to detect and report criminal financial activity and deter criminals from flowing illicit gains through the U.S. financial system.
One of AMLA's primary objectives is for financial institutions to spend time doing what is truly necessary for detecting criminal activity and not spin their wheels with policies and procedures on tasks that bring no benefit to law enforcement. The AMLA is extensive, and there are many steps involved before FinCEN can implement the act, such as conducting studies, writing regulations, and publishing guidance. The published Anti-Money Laundering and Countering the Financing of Terrorism National Priorities is one such example. One thing is clear; a financial institution's culture of compliance is more critical now than ever, and bank executives must take note.