Banks Should Know Who Their Customers Are, No Excuses
February 29th, 2012
The U.S. Treasury’s Financial Crimes Enforcement Network (FINCEN) proposed a very important new regulation today. Via WSJ’s Corruption Currents:
The U.S. Treasury Department’s financial crime network said Wednesday it issued a request for comments pertaining to a rule it wants to propose that would mandate due diligence obligations on financial institutions.
The proposal would require financial institutions to identify the beneficial owners of their account holders, a key component to financial transparency sought by activists. Comments on the advanced notice for the proposed rule will be accepted for 60 days.
While not going as far reaching as the Task Force’s recommendation on beneficial ownership, which would require the government to collect beneficial ownership information for all corporations, trusts, or foundations, if passed this regulation would be a big step forward for financial transparency.
The basic principle of knowing who you are doing business with applies here. Without it, bankers (and others) will continue to use the excuse of plausible deniability to keep making money off of crime. I don’t think that anyone has ever laid this out better than Task Force Director Raymond Baker did last fall: (Jump to 34:00 through 36:00)