Reposted from the blog of the Task Force on Financial Integrity & Economic Development
Last week, the U.S. Senate Banking Committee held a hearing titled, “Patterns of Abuse: Assessing Bank Secrecy Act Compliance and Enforcement.” The committee called three regulators to testify: David Cohen, Under Secretary for Terrorism and Financial Intelligence, United States Department of the Treasury; Thomas Curry, Comptroller, Office of the Comptroller of the Currency (OCC); and Jerome H. Powell, Governor, Board of Governors of the Federal Reserve System.
There were a lot of takeaways from this hearing. I’m sure that we will cover them on this blog in the days to come. But I think the clearest takeaway for policy change is that the U.S. needs some form of consolidation of the law enforcement and regulatory apparatus of its federal government. When repeatedly questioned, regulators from the OCC, Federal Reserve, and Treasury all passed the buck to other departments, and even resisted (video above) weighing in with their opinion on what enforcement is necessary. The Department of Justice wasn’t even called in to testify, even though the decision to criminally prosecute HSBC was ultimately in their hands. Enforcing anti Money-laundering laws is already a complicated process, but it is made even more complicated when you’re trying to coordinate between a half dozen different agencies and departments.
The most important impact of consolidation would be that one regulator would be held accountable for enforcing the law. Instead of calling in a panel of three different parties who can all (sometimes reasonably, sometimes not) point fingers at others for responsibility, (“The Justice Department didn’t prosecute, so we can’t do more”) oversees like the U.S. Senate could hold one authority accountable.