Strengthening BSA/AML defenses: Critical role of ERTs in modern day compliance
The Bank Secrecy Act (BSA) was passed by Congress in 1970 to fight money laundering and has been enhanced multiple times to adapt to the changing compliance landscape, the most important being inclusion of the USA Patriot Act after 9/11.
For about 54 years now, financial institutions or nonfinancial institutions have understood the BSA as the foundation for ensuring regulatory compliance. The BSA requires any business or financial institutions engaged in transactional services to keep and file records that can be used to detect and stop money laundering and terrorist activities.
However, enforcement actions imposed just in the first half of 2024 by the Treasury Department’s Financial Crimes Enforcement Network highlight the importance of proactive measures rather than just being compliant. These enforcement actions include a $7.5 million fine in January against Las Vegas casino’s MGM Grand and Cosmopolitan, along with TD Bank reserving $2.6 billion over BSA liabilities in the bank’s most recent disclosure last month. This clearly reinstates the need for having an enterprise response team (ERT) as an essential part of modern anti-money laundering efforts.
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