4 min read

9/11 Created the AML Community We Know Today

The End of the Innocence[1]

As we approach the 20th remembrance of September 11th, 2001, and the first attack on US soil since Pearl Harbor, many are writing or speaking of their experiences (sadly January 6th is now the first attack of US citizens against each other since the Civil War). Since my youngest daughter was only 7 at the time, it dawned on me that while my experience was not remotely unique, I think it is important to note the day and immediate aftermath before memories become too faded and not useful as a learning tool for our AML community.

As we are currently processing the new AML reform law, September 2001 was a time when many were questioning the value of the Bank Secrecy Act, and with the criticism and eventual defeat of the “Know Your Customer” regulations in 1999, BSA was in danger of being severely limited or even some parts eliminated.

September 11. 2001 was a beautiful day in Washington DC and as always, I was in my office at the American Bankers Association (ABA) early since commuting was always a challenge. On the phone with one of my (and still longtime) friends Elliot Berman (whom I work with now at AMLRS), we were discussing some BSA related questions that had come up when someone walked in and said, look at what is happening in New York. We talked for a short time more and then we heard there were bombs going off a few blocks away at the State Department (not true). We ended the conversation and ABA staff made the decision to try to get home to our families. Cell phones in 2001 were terrible, and no one was able to connect. It took 4 hours to go 30 miles but eventually I got home. Trying to process NYC, Pennsylvania, and the Pentagon took several days, but we started to address how the banking industry could help.

Obviously, the reactions to the attacks took many forms. A key player, FBI’s Dennis Lormel, had existing relationships with many bankers and when tasked with running the newly formed Terrorist Financing Operations Section (TFOS), gathered many bankers together, including some from our ABA committees, to share information about the financial footprints before that horrific day. In addition, Congress acted swiftly to try and pass legislation addressing many facets of terrorist financing.


While the Patriot Act was seen as a direct response to 9/11, here is what I wrote (and still maintain) in 2004:

“It is clear that the lion’s share of the PATRIOT Act provisions addressing the financial industry (title III) were left over from previous unsuccessful legislative vehicles covering traditional money laundering.”

I also said, “the American Bankers Association (ABA) actively supported the PATRIOT Act because it covered a myriad of new financial service providers that previously did not have anti-money laundering (AML) obligations, and it contained several other new provisions long advocated by the industry.”

We can spend a good deal of time on the various provisions but let me cover a few critical sections.

Our industry was well respected by both sides of the aisle (there’s a twist) for being candid and supportive of laws designed to actually address money laundering issues, so we were called up to discuss the crafting of the Patriot Act. There was no social media to hinder our discussions; we were told simply, “this law will pass with or without you, what do you propose?” I said simply, “cover all with financial footprints and all new obligations be done via regulation so there would be a public notice and comment process.”

We also pushed for information sharing (314 sections) and staff obliged (lack of coverage for some in 2021 was not the fault of staff) and said in return they wanted a formal requirement on account opening regulations (eventually 326).

As an aside, while most Congressional staff were open and candid, we were ambushed by a Senate staffer that told the Washington Post (never confirmed by the paper by the way) that a banker actively opposed provisions in the Patriot Act. The banker was simply asked about operational issues with some provisions and answered honestly. The Post story then, and still, was sloppy and wrong. I personally support the press but this eats at me 20 years later because it was lazy and actually appeared in a book several years ago…

The final law was signed by President Bush on October 26, 2001 and he said,

“[W]e will direct every resource at our command to win the war against terrorists: every means of diplomacy, every tool of intelligence, every instrument of law enforcement, every financial influence. We will starve the terrorists of funding, turn them against each other, rout them out of their safe hiding places and bring them to justice."

In 2001, the American Bankers Association-American Bar Association Money Laundering Enforcement Conference (which I was honored to create) was held on October 22nd and the regulators, law enforcement and the private sector worked closely in Arlington, Virginia those several days to figure out how to continue working together and address how to improve overall due diligence.

Going forward, the now AML community continued to review what we could do to improve, and the 9/11 Commission concluded:

“The conspiracy made extensive use of banks in the United States, both branches of major international banks and smaller regional banks. All the operatives opened accounts in their own names, using passports and other identification documents. There is no evidence that they ever used false social security numbers to open any bank accounts. Their transactions were unremarkable and essentially invisible amidst the billions of dollars flowing around the world every day.”

What remains a continuing theme in 2021 is information sharing and private-public partnership. These themes are strongly supported, but a comment I made twenty years ago bears repeating:

“To stem the financing of terrorism, however, government must commit to providing up-to-date intelligence to the financial sector. We have seen the beginning of that process, but it must be increased. Any other strategy is doomed to fail.“

I am optimistic that this is happening, either through the AML reform package, or organically ….

The aftermath of 9/11 accelerated the focus on anti-money laundering, added CTF and now includes such disparate areas as elder abuse, human and wildlife trafficking, and cybercrime. It added program and policy requirements, risk assessments and many other protective mechanisms.

 Offer up your best defense---this is the end of the innocence.


[1] The End of the Innocence, written by Don Henley and Bruce Hornsby and released in 1989.

Posted by John Byrne

Mr. Byrne serves as Vice Chairman of AML RightSource. He is an internationally known regulatory and legislative attorney with more than 30 years of experience in banking and financial crimes. Mr. Byrne has particular expertise in all aspects of regulatory management, anti-money laundering (AML) issues and has served in leadership positions at trade associations, financial services industry groups, and government working groups. Mr. Byrne earned his undergraduate degree at Marquette University and his juris doctor at George Mason University School of Law. He currently serves as a special advisor to the ACAMS Advisory board and on Marquette University’s Commercial Banking Board.