The primary supervisor of U.S. national banks will soon publish guidance "reiterating" how financial institutions can manage compliance risks posed by their foreign correspondent clients, the agency's chief said Wednesday.
Republican lawmakers have asked a governmental watchdog to investigate the U.S. Treasury Department's anti-money laundering and sanctions enforcement efforts in light of allegations that bank examiners may have improperly requested account closures.
The International Monetary Fund called on watchdog groups and governments to clarify their compliance expectations and improve cross-border data-sharing in an effort to reverse a global decline in correspondent banking relationships.
Financial institutions have yet to develop a practical method to evaluate and limit the compliance vulnerabilities that political figures and high-risk businesses pose, according to a U.K. study published Tuesday.
Fear of regulatory trouble is compelling some banks to turn down business to avoid the huge compliance costs of vetting potential clients, attendees at a banking conference in London heard Thursday.
Short of abiding by the Community Reinvestment Act and other prohibitions against discriminatory lending, banks still have the right to choose who they'll do business with. While that seems like an obvious statement, it gets drowned out in the debate about "de-risking."
A number of large U.S. and international banks are dropping customer accounts and services tied to high-risk geographical regions and lines of business in response to regulatory pressure, including enforcement actions.
Dozens of small banks and credit unions have begun courting money services businesses over the past year, offering financial services to the high-risk clients in exchange for compliance-related fees.
Oregon residents Laurent Barnabe and Douglas Ferguson were sentenced on money laundering and other charges for their role in a Ponzi scheme run through an offshore bank based in Grenada.