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Dominion In the News
Overhaul of U.S. Regulations Could Result in Exam Consistency
By Matt Squire , Money Laundering AlertA massive overhaul of U.S. financial regulations proposed by Treasury Secretary Henry Paulson likely will lead to more consistency in anti-money laundering examinations, compliance experts say.
The “Blueprint for Financial Regulatory Reform,” unveiled by Paulson in March, would expand the oversight power of the Federal Reserve, consolidate the Securities and Exchange Commission and the Commodity Futures Trading Commission and eliminate the Office of Thrift Supervision (OTS). The Office of the Comptroller of the Currency would assume the operations of the OTS.
Banks and thrifts are regulated by one of four federal agencies: federally-chartered banks by the OCC; federally-chartered savings and loans by the OTS; and state chartered banks can opt to be regulated by the Fed or the Federal Deposit Insurance Corp.
“When you have that many banks and that many examiners from four different agencies, there is going to be disparities [in AML exams],” said David Caruso, chief executive officer of Dominion Advisory Group in Washignton, D.C.
Under the proposed overhaul, one agency would conduct Bank Secrecy Act examinations for federally-chartered institutions, and one agency for statechartered institutions.
The consolidation of the OTS into the OCC would lead to better-coordinated BSA exams for federally chartered banks and eliminate inconsistencies between the agencies, said Ross Delston, founder of Washington, D.C.-based consulting firm GlobalAML.com.
“The exam teams are different, so you have different standards, approaches and priorities among the different regulators,” Delston said.
The OCC tends to be more aggressive in its AML/BSA examinations, said Caruso. The agency also has more experience with larger institutions.
“If you are a large thrift you could see some changes to your BSA examination,” said Caruso. “If you are a small OCC bank or a small OTS thrift, you probably won’t see much difference at all. But as far as the applications of standards, I don’t think you would see much in the way of changes.”
The proposal also might lead to streamlined AML exams for state-chartered banks. In the proposed overhaul, the Treasury Department called for a study to determine whether the Fed or the FDIC is better suited to serve in that role.
Paulson acknowledged that the proposal could takes years to implement, and banking professionals gave the plan little chance of passage.
The “Blueprint for Financial Regulatory Reform,” unveiled by Paulson in March, would expand the oversight power of the Federal Reserve, consolidate the Securities and Exchange Commission and the Commodity Futures Trading Commission and eliminate the Office of Thrift Supervision (OTS). The Office of the Comptroller of the Currency would assume the operations of the OTS.
Banks and thrifts are regulated by one of four federal agencies: federally-chartered banks by the OCC; federally-chartered savings and loans by the OTS; and state chartered banks can opt to be regulated by the Fed or the Federal Deposit Insurance Corp.
“When you have that many banks and that many examiners from four different agencies, there is going to be disparities [in AML exams],” said David Caruso, chief executive officer of Dominion Advisory Group in Washignton, D.C.
Under the proposed overhaul, one agency would conduct Bank Secrecy Act examinations for federally-chartered institutions, and one agency for statechartered institutions.
The consolidation of the OTS into the OCC would lead to better-coordinated BSA exams for federally chartered banks and eliminate inconsistencies between the agencies, said Ross Delston, founder of Washington, D.C.-based consulting firm GlobalAML.com.
“The exam teams are different, so you have different standards, approaches and priorities among the different regulators,” Delston said.
The OCC tends to be more aggressive in its AML/BSA examinations, said Caruso. The agency also has more experience with larger institutions.
“If you are a large thrift you could see some changes to your BSA examination,” said Caruso. “If you are a small OCC bank or a small OTS thrift, you probably won’t see much difference at all. But as far as the applications of standards, I don’t think you would see much in the way of changes.”
The proposal also might lead to streamlined AML exams for state-chartered banks. In the proposed overhaul, the Treasury Department called for a study to determine whether the Fed or the FDIC is better suited to serve in that role.
Paulson acknowledged that the proposal could takes years to implement, and banking professionals gave the plan little chance of passage.