The American Bankers Association, the largest banking trade association in the U.S., today released a proposal to amend the Bank Secrecy Act of 1970 (officially the "Bank Records and Foreign Transactions Act"). The proposal was drafted by a committee of experts in the industry, many of whom were senior federal officials responsible for implementing the anti-money laundering and counter-terrorist financing sections of the USA Patriot Act (along with Dennis Lormel, Matthew Levitt, and Michael Jacobson). A number of the Contributing Experts, including myself, worked with them while they were in office and remain in touch, and we have the highest respect for their expertise and dedication to protecting financial institutions from misuse by criminals and terrorists.
In early May, I suggested "a comprehensive review by government officials, the broader CT community, and financial institutions... to chronicle the current threats and weaknesses of terrorist financing and develop an improved and credible strategy for combating them." It's not that the current legal, regulatory, and international regime fails altogether - the system works in part and fails in part. We need a recognition of those realities and an update of legal authorities, structure, and program funding, and a fresh look at the mechanisms in use for the past seven years, since the passage of the USA Patriot Act. The ABA proposal appears to a good first step towards that broader review. By its nature, the proposal cannot address non-banking terrorist funding mechanisms and the counter-measures developed over time. We look forward to addressing the issue in more detail in the coming months, including at a conference next week, co-sponsored by the ABA (bankers) and ABA (lawyers), at which several of us are making presentations on terrorist financing issues. More next week.
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