Chairmen Pearce and Luetkemeyer, Ranking Members Perlmutter and Clay, and distinguished members of the House Financial Services Subcommittees on Terrorism and Illicit Finance and Financial Institutions and Consumer Credit, I am honored by your invitation to testify before you today.
We are confronting a pivotal moment in our 48 years of combatting illicit finance under the Bank Secrecy Act (“BSA”). As our counter-illicit financing efforts have expanded and become ever more important, they are also increasingly challenged – provoking fundamental questions of effectiveness, cost, roles and responsibilities, and, ultimately, sustainability. The combination of these developments necessitates fundamental reform of the BSA and the expanded anti-money laundering / countering the financing of terrorism (“AML/CFT”) regime it supports.
This hearing marks an important and welcome opportunity to discuss how best to pursue such fundamental reform in modernizing the BSA and the U.S. AML/CFT regime. I am grateful for your leadership in addressing these issues, including through the proposed Counter Terrorism and Illicit Finance Act and the proposed End Banking for Human Traffickers Act of 2017 under consideration by your Subcommittees.
Our BSA and broader AML/CFT reform efforts require both immediate action and enduring attention by Congress. These efforts must consider:
I. The need for a strategic approach to address mounting frustrations of all AML/CFT stakeholders;
II. The modern evolution of our AML/CFT regime to understand the expanded interests, heightened complexity, unprecedented importance, and global reach that it now encompasses; and
III. Legislative action amending the BSA to establish a comprehensive framework for guiding and managing our expanded AML/CFT regime in an effective, efficient, and enduring manner.
My testimony below follows this roadmap and concludes by offering detailed recommendations for Congress to expand, amend, and strengthen the proposed Counter Terrorism and Illicit Finance Act.