A Government Accountability Office official reiterated in a House subcommittee hearing Tuesday his office’s recommendation that regulators undergo a retrospective review of Bank Secrecy Act (BSA) rules and that Treasury assess shifts in remittance flows to non-banking channels.
Michael E. Clements, director of GAO’s financial markets and community investment office, revisited findings of a GAO study released this February. In that report, GAO said 80 percent of Southwest border banks limited or did not offer services to customers that are considered high risk for money laundering; he also discussed findings from a March report on the effects of de-risking on remittance flows to fragile countries.
In testimony before before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, Clements said banks may choose to limit services because they must conduct extra account monitoring of these customers to comply with BSA/anti-money laundering oversight. He added that money transmitters serving Haiti, Liberia, Nepal, and Somalia also reported losing bank accounts for this reason.
Government Accountability Office testimony
Remittances to Fragile Countries: Treasury Should Assess Risks from Shifts to Non-Banking Channels (March 2018)
Derisking along the Southwest Border Highlights Need for Regulators to Enhance Retrospective Reviews (February 2018)