Senate Proposal Would Prohibit Banks from Processing Card Transactions Tied to Tax Evasion, Laundering

By Brian Orsak

Lawmakers proposed a measure Wednesday that would potentially prohibit banks from processing credit card transactions for merchants and maintaining correspondent accounts for financial institutions deemed vulnerable to money laundering and tax evasion. The proposal, by Sens. Carl Levin (D-MI) and Ted Kaufman (D-DE), would give the U.S. Treasury Department the power to order financial institutions to sever ties with jurisdictions and financial institutions deemed an impediment to tax enforcement or a "primary money laundering concern" under the Patriot Act. The lawmakers introduced the measure, which would also affect correspondent payable-through accounts and debit card transactions, as part of a broader...