AML/CFT relief would help credit unions serve members
A House Financial Services subcommittee will conduct an oversight of the Financial Crimes Enforcement Network (FinCEN) today. Detailing numerous changes that would support credit unions’ efforts to aid law enforcement, America’s Credit Unions also shared the impact of rising compliance costs in comments sent to the subcommittee.
“While largest banks are better positioned to absorb these costs, the anti-money laundering/countering the financing of terrorism (AML/CFT) framework has made it significantly more difficult for credit unions to provide affordable financial services to their members,” the letter reads. “This burden is especially challenging for smaller credit unions, which must devote a greater share of their resources to increasingly complex compliance requirements while continuing to serve their members."
Changes that would reduce burdens while assisting law enforcement include:
- Raising the reporting thresholds for Currency Transaction Reports (CTRs) and Suspicious Activity Reports (SARs). A bill from Rep. Barry Loudermilk (R-GA) (H.R. 1799) that would increase the CTR threshold from $10,000 to $30,000, increase the SAR threshold from $5,000 to $10,000, and adjust both thresholds periodically for inflation has already advanced out of Committee;
- Clarifying key terms, preserving flexibility for credit unions of all sizes, providing practical guidance on AML/CFT Priorities, ensuring expectations are proportionate to a credit union’s size and risk profile, and ensuring examiners do not criticize credit unions for reasonable, documented, risk-based decisions. These priorities were raised in a June letter to FinCEN; and
- Providing a safe harbor from the annual renewal requirement for institutions participating in information sharing under section 314(b) of the PATRIOT Act.