Deputy Secretary of the Treasury Michael Faulkender addressed the 62nd Bank Secrecy Act Advisory Group (BSAAG) plenary meeting organized by the Financial Crimes Enforcement Network (FinCEN) in Washington. During this event, he outlined the Trump Administration's guiding principles for modernizing the Bank Secrecy Act (BSA).
Faulkender emphasized several key principles that will guide regulatory efforts. He stated, "Regulation should derive from a clear statutory mandate, including safety and soundness, mitigating material risk to financial stability, and consumer protection." Additionally, he highlighted that regulation must be efficient, fair, objective, and transparent.
The Deputy Secretary underscored the importance of balancing costs and benefits when evaluating regulatory actions. He noted that "this balancing act requires a careful tailoring of regulatory actions," considering different risk profiles among financial institutions.
To reflect the Administration's focus on Main Street priorities, Faulkender announced changes in BSAAG membership to include more small community banks. This adjustment aims to give smaller institutions a stronger voice in regulatory reform discussions.
Faulkender also addressed the need for modernization within the Anti-Money Laundering/Countering Financing of Terrorism (AML/CFT) regime. He stated that efforts are underway to make it "effective, risk-based, and focused on the greatest threats to financial institutions and national security."
As part of these modernization efforts, Treasury is working on improving reporting processes for Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs). Faulkender mentioned ongoing exploration into streamlining SAR reporting to benefit both law enforcement agencies and financial institutions.
Treasury aims to encourage responsible innovation within financial institutions while enhancing how suspicious activities are identified and reported. The department is committed to fostering public-private partnerships through initiatives like BSAAG.
In conclusion, Faulkender reiterated support for updating AML/CFT laws under the AML Act's directive: "Our vision for a modernized BSA regulatory and supervisory regime is one where financial institutions comply with AML/CFT laws...and generate highly useful information for law enforcement."
