For two decades, I have worked with policy makers and law enforcement in North America and Europe, which prevent terrorism, violent extremist groups, weapons prolificers and criminal networks from exploiting the American banking system to strengthen financial security measures. I have supported hard restrictions. I have pushed to shut down the imperfect flaws in the enforcement. And I have worked to hold people who enable illegal finance and business, wisely or not, in account.
From the beginning, banks have been essential partners in these efforts. Through “Learn Your Customer” procedures and Anti-Money Laundering laws Bank secrecy act 1970Financial institutions have supplied data and intelligence that help the law enforcement to highlight illegal activities such as human trafficking rings, Phantanel Supply Series, and Terror Network Network.
These outlines played an important role in the security of the country. Unfortunately, some tools are now targeted aimed at preventing identification and criminal activity and unjustly valid customers are out of financial system to legitimate customers – an incident is widely known as “debanking”.
Most Americans are unaware that any cash transaction of more than $ 10,000 triggers the construction of the currency transaction report to be filed with the federal government. The limit of the amount of that dollar was determined when Lindon Johnson was in the White House and was incredibly, never updated to inflation. In today’s economy, $ 10,000 can barely cover the cost of a used car. Nevertheless, banks still need to flagged such transactions, regardless of reference, producing millions of reports every year that gives very low price to law enforcement.
The suspected activity report is yet another layer of government investigation. Banks More than 4 million suspicious activity report filed Last year, according to the Treasury Department. Former officials admitted that this avalanche of paperwork is very low to improve public safety. In fact, it can create a burden for investigators to recognize and separate suspected activity from worldly. When the enforcement cannot separate the signal from the noise, it becomes dangerous.
Meanwhile, regulators continue to pressurize banks to implement extensive risk labels in entire industries, as they include cash-heavy businesses, serve foreign customers or work in adverse areas-all in the name of “safe and sound” to our financial system. This is not theoretical. Religious charitable, international aid organizations and countless immigrant-owned businesses have faced the danger of the debanking to all. They are not terrorists or criminals. Those fellow Americans are pushed to the financial margin by a system that confuses the bureaucracy with caution.
Have started solving the problem through Congress Financial institution regulatory modernization actThis law will increase transparency and accountability how agencies issue guidance and conduct examinations of financial institutions and their customers. This will help ensure that banks are not punished for the service of legitimate customers in politically sensitive areas. This is an encouraging beginning, but it will not be enough in itself.
Single most effective step policy makers can take today to address the unexpected debanking of legitimate citizens, which is to modernize the money laundering framework. Modernization should ensure that banks provide relevant and actionable information that actually helps investigators and allows financial institutions to change box-ticking alerts and reports with data analysis that spots the actual pattern of misuse. Banks will still verify the identity, monitor the accounts and report the moment when they see suspicious activity.
These reforms will intensify these responsibilities and make our country and banking industry safe. In addition, financial institutions from clear standards will have to maintain relations with customers, while authorities provide rapid access to data when real threats emerge.
The US led the world in hostile construction, a financial system for terrorist financing and illegal finance. This leadership depends on a financial system that is both safe, reliable and widely accessible. When honest actors are incorrectly, arbitrary and without transparency, and financial access is considered as a privilege rather than a right, the foundation of that leadership ends.
Policy makers do not need to choose between safety and fairness. A modern-man-prone governance will strengthen both. This will allow regulators and institutions to focus on real -risk people and reduce the burden on both financial institutions and their customers following laws
I have spent most of my life in an attempt to make America safe by making our financial system difficult to exploit America. That mission still matters. But the equipment we made decades ago are not compatible with today’s challenges. Without improvement, the anti-laundering regime will fail in its most basic duties: the difference between a friend and the enemy.
Congress and administration should now work. The bets are very high to allow inertia to take the day.
David Ibsen is a founder and former Executive Director of the Counter Extremeism Project and is an expert in the impacts of restrictions and financialRule.
