Treasury teases revising AML/CFT regulations to address ‘de-risking’

The Treasury Department might propose new regulations for financial institutions aimed at discouraging banks from shutting out large swaths of potential banking customers because of risk concerns, an issue called “de-risking.”

In a report released Tuesday, the agency recommended proposing regulations that would “require financial institutions to have reasonably designed and risk-based AML/CFT (anti-money laundering/countering the financing of terrorism) programs supervised on a risk basis, possibly taking into consideration the effects of financial inclusion.”

The report also recommended clarifying and revising AML/CFT regulations under the Bank Secrecy Act (BSA) and guidance for money service businesses (MSBs) that offer money transferring services, which are among the entities most affected by de-risking actions taken by financial institutions.