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Banks Ask Congress To In-Source Money Laundering So They Don’t Have To

First on the G.O.P.’s banking agenda in 2018: Making sure banks don’t have to spend their tax savings figuring out who the bad guys are.
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Rep. Blaine Luetkemeyer opening his early Valentine's Day cards from bank lobbyists. (Rep. Blaine Luetkemeyer)

Rep. Blaine Luetkemeyer opening his early Valentine's Day cards from bank lobbyists. (Rep. Blaine Luetkemeyer)

Republicans are not known particularly for favoring federal registries. They also talk a good game about states’ rights, as long as those rights don’t include the right to get high. However, they are more than happy to consider ignoring both of those predispositions, as well as presumably spending money—something else they often pretend not to like doing—if the biggest banks in the country ask nicely. I mean, they wouldn’t want them spending their not-so-hard-won tax savings on following a silly little rule when they could just outsource that to the Deep State.

Efforts to overhaul U.S. anti-money-laundering laws are gathering steam, as large banks, anticorruption groups and law-enforcement authorities coalesce around the idea of creating a national database of corporations and their true owners….

“Right now, banks are obligated to find out who owns companies…They just have to do that on their own,” Mr. Baer said. “It will help banks do their due diligence more efficiently if they can check [an official] source.”

Of course, it wouldn’t be 2018 if things were just left at that. What other post-Christmas gifts can Reps. Steve Pearce (R-N.M.) and Blaine Luetkemeyer (R-Mo.) throw in to sweeten this already very sweet fruitcake?

The legislation from Reps. Pearce and Luetkemeyer also contains a number of other measures that would lighten the regulatory load on banks, including many that were advanced by the Clearing House in a report issued last year…. For instance, the bill includes a provision that would create a system giving banks the freedom to experiment with new anti-money-laundering technologies, to be approved on a case-by-case basis.

As written, it would also keep state attorneys general and other nonfederal officials out of the loop….

Meanwhile, some members of law enforcement balk at a measure that would increase the threshold at which banks must report transactions with FinCEN to $30,000 from $10,000.

Of course, Mr. FBI: The Clearing House bank lobby totally understands where you’re coming from. It’s just that this bill is not about making things easier for law enforcement. It’s about making them easier for banks. We regret the confusion, but, you know, not our problem, Special Agent.

“Certainly, to law enforcement a small-dollar SAR [suspicious-activity report] might be the proverbial last piece in the puzzle in an investigation, but they aren’t seeing the opportunity cost of that SAR,” Mr. Baer said. “It’s a shame that we actually have to shield banks from criticism for actually catching more bad guys.”

Banks Seek Government Help to Track Money Laundering [WSJ]


Appropriate money-laundering site. Saif Gill [CC BY 3.0], via Wikimedia Commons

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Deborah Cordwell [CC BY 3.0], via Wikimedia Commons

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