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Monday, April 4, 2016

ABA Urges New York to Drop Proposed AML Regulation

In a comment letter to the New York State Department of Financial Services, ABA urged the agency to withdraw a proposed anti-money laundering regulation that would apply to all financial institutions chartered in the state. The proposal would set forth a set of specific mandates which ABA said would be highly prescriptive and contradict existing federal Bank Secrecy Act regulations.

As proposed, the rule would require that a financial institution’s “certifying senior officer” file an annual certification verifying compliance with the transaction monitoring and filtering requirements set forth in the proposal. ABA argued that the regulation would force chief compliance officers to accept liability for actions outside their control, and ultimately deter qualified individuals from accepting the chief compliance officer role.

ABA further pointed out that the proposal sets an unreasonably high bar for compliance that would likely diminish the risk appetite of financial institutions, leading many to close or not open marginal accounts and further perpetuate the “derisking” trend. The association urged the NYDFS to withdraw the proposal and reinforce participation with existing federal and international authorities in the ongoing effort to combat money laundering and terrorist financing.

Read the comment letter.

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