Banks Want to Ease Self-Regulating Rules for Money Laundering

February 22, 2017

A lobbying group for the country’s biggest banks says they waste billions of dollars a year investigating suspicious activity. It’s now asking the Trump administration to change the way in which the finances of money launderers and terror groups are investigated.

The Clearing House lobbies for Bank of America, Wells Fargo, and the giant HSBC which in 2012 was slapped with the biggest fine in banking history. HSBC Holdings had allowed itself to be used by the Sinaloa Cartel and the Colombia Norte del Valle Cartel to launder cash.

HSBC was fined $1.9 billion because banks are supposed to police themselves to stop that kind financial crime. The Clearing House is asking the new administration to take up money laundering investigations itself. 

Stan Smith is an economist and banking expert. 

"Catching criminals is the government’s job. It’s society’s job. But they’re asking banks to pay in the billions of dollars a year of extra costs. That gets passed on to you and me that have bank accounts," he said.

The lobbying group said it spends $8 billion a year reporting transactions as small as $10,000 in withdrawals. The Trump administration, which has said it would ease some regulations but at the same time would target terror groups, has not yet made a decision on the request.