Has the Time Come for Adoption of Digital Asset Legislation in the US?
U.S. Senators Kirsten Gillibrand (D-NY) and Cynthia Lummis (R-WY) have introduced the Responsible Financial Innovation Act (also being referred to as “Lummis-Gillibrand”). The goal of the proposal is to create “…complete regulatory framework for digital assets that encourages responsible financial innovation, flexibility, transparency and robust consumer protections while integrating digital assets into existing law.” The legislation is noteworthy as a bipartisan effort to apply a clear regulatory structure to digital assets – including virtual or crypto currencies. Currently, regulation of digital assets is a patchwork of federal and state laws and interpretations, most of which have looked to squeeze digital assets into existing regulatory structures, mostly created years before the advent of digital assets.
FinCEN Wants Your Comments on How to Regulate Real Estate
The Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury Department, wants your help in deciding how to bring more of the real estate industry under the Bank Secrecy Act (BSA). In the December 8, 2021 edition of the Federal Register, FinCEN published an Advanced Notice of Proposed Rulemaking (ANPRM) - Anti-Money Laundering Regulations for Real Estate Transactions. The ANPRM asks for comments on “…potential requirements under the [BSA] for certain persons involved in real estate transactions to collect, report, and retain information.”
Where is FinCEN on Virtual Currencies?
Virtual currencies (sometimes referred to as cryptocurrencies) continue to move into established commerce. The number of merchants accepting the currencies is growing, as are the number of people looking to the currencies as investment vehicles, and to use them for retail transactions. As virtual currencies have moved from techno-curiosities to mainstream commerce, FinCEN has issued a number of advisories and guidance about how the Bank Secrecy Act (BSA) regulatory structure apples to them. FinCEN is not the only agency addressing to virtual currency; for 2020 the IRS has added a yes or no question to the Form 1040 (used by individuals in the US to file federal income tax) that asks whether the taxpayer has acquired an interest in virtual currency.
FinCEN’s Updated Guidance on §314(b)
Information sharing in the BSA/AML space is a topic of ongoing discussion and such an essential tool. I wrote about the value and the challenges in a prior post. One part of the US information sharing regime is Patriot Act §314(b).[1] Since its passage, FinCEN has issued guidance about the section on a number of occasions; the most recent in December 2020 through the issuance of an updated Fact Sheet. Section 314(b) established a process for financial service companies[2] (FIs) to share certain information under the protections of a safe harbor from liability for privacy law violations or from sharing false information. Participation under §314(b) is voluntary.
Fraud: In Stock for the Holidays
Every year, fraud on consumers, sellers, and financial service providers increases during the holiday shopping season. This year, pandemic conditions have led to the reduction of brick-and-mortar shopping, and is driving more merchants online for the first time. This massive shift to online commerce with the inevitability of holiday fraud, sets the scene for a season that promises to be more challenging than financial crimes space is probably used to seeing.
Boards Can’t Exercise Oversight Without the Right Information
This post is part of our occasional series on AML program fundamentals which focuses on refreshing foundational knowledge for experienced members of the AML community and providing an introduction to key topics for those new to the subject.
What are the Cybercriminals Up to Now?
The Financial Crimes Enforcement Network (FinCEN[1]) has issued an advisory[2], providing guidance and red flags for cybercrime and cyber-enabled crime occurring during the COVID-19 pandemic. The advisory is intended to, “aid financial institutions in detecting, preventing, and reporting potential COVID-19-related criminal activity.” As you know, there have been numerous alerts issued by various government agencies about crimes and frauds being perpetrated during the pandemic. Links to many of them are available on our COVID-19 resources page - feel free to disseminate them throughout your institution or firm.
How Helpful is the Latest FinCEN Guidance on Customer Due Diligence?
FinCEN has issued additional guidance about the responsibility of financial services companies (FIs)[1] relating to customer due diligence (CDD). The guidance takes the form of responses to three frequently asked questions (FAQs) about the requirements of CDD Rule.[2] The FAQs focus on “obtaining customer information, establishing a customer risk profile, and performing ongoing monitoring of the customer relationship.” Let’s look at the details of the guidance and see how this may impact FIs...
Elder Financial Exploitation is a Financial Crime
The title of this post may seem obvious, but do you know what your financial services company should be doing to detect, report and prevent it? As with many financial crimes, the activity often touch FIs. So what exactly is elder financial exploitation (EFE)? EFE refers to the “illegal or improper use of an older adult’s funds, property, or assets.[i]”
