The current design of federally-mandated suspicious activity reports makes it difficult for banks to report important information tied to suspected mortgage fraud, say former law enforcement agents and consultants.
The flood of suspicious activity reports (SARs) filed by financial institutions each year may be hurting law enforcement efforts to investigate financial crimes, Frank, a Massachusetts Democrat, said Thursday.
Regulators spent less face time addressing AML concerns as the lion's share of regulatory attention was devoted to subprime lending standards and the broader credit crisis. But, when financial regulators and the Justice Department weighed in, they did so heavily, assessing record penalties.
U.S. regulators acknowledged the outcry from the financial industry for Bank Secrecy Act reporting relief but said they would not take any action until a government effectiveness study is released early next year, according to a congressional report released Thursday.
A bill that would reduce the number of Bank Secrecy Act related reports financial institutions must file won't become law because of opposition from law enforcement and a backlog of higher-priority bills on Capitol Hill, banking compliance experts say.
Financial institutions with limited resources often dont seek exemptions for filing currency transaction reports because they are unable or unwilling to handle the required additional due diligence and regulatory scrutiny.
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