Podcasts about bsa aml

Most of us have heard the term "AI agent" but it is only the minority of banks and fintechs that have done any kind of implementation. This is partly because it is not a trivial task and there are real risks to getting this wrong. What is needed is some kind of framework that helps reduce these risks and provides best practices for implementing AI agents in financial services.My next guest on the Fintech One-on-One podcast is Simon Taylor, the Head of Strategy and Content for Sardine and the author of the Fintech Brainfood newsletter. Today, Sardine has released a white paper, titled The Agentic Oversight Framework - Procedures, Accountability, and Best Practices for Agentic AI Use in Regulated Financial Services. It is a how-to document for implementing AI Agents into your bank, credit union or fintech. We unpack the white paper in this podcast, with as little jargon as possible, making it approachable for any risk or compliance executive.In this podcast you will learn:Simon's background and why he joined Sardine in 2022.How banks are approaching BSA/AML compliance today.What Sardine is trying to achieve with this new white paper.What concerns people in financial services have about hiring an AI agent.How AI agents interact with humans in compliance departments.How much more effective AI agents can be.The six different processes in the Agentic Oversight Framework (AOF).How you manage the risk of hallucination in your LLMs.How you can scale the AOF beyond BSA/AML into other areas.Some examples of the AOF in action.If you are starting at zero how you start working with AI agents.Why you should jump in now even though the models will continue to get better.Why data security is such a critical component of the implementation of AI agents.Connect with Fintech One-on-One: Tweet me @PeterRenton Connect with me on LinkedIn Find previous Fintech One-on-One episodes

Beyond IP, the role of geolocation data in combating AML and fraud. John Byrne sits down with David Briggs, CEO and Co-Founder of GeoGuard and GeoComply, to discuss the limitations of IP addresses and the role that advanced geolocation data can play in AML and in fighting other types of financial fraud, FinCEN's recent guidance on encouraging innovative responses to COVID-19 fraud, and how to improve the BSA/AML data analysis infrastructure.

Welcome to a special live edition of Fintech Recap! For the first time in 2025, your host Alex Johnson is joined IRL by Jason Mikula (Fintech Business Weekly) and Jason Henrichs (CEO of Alloy Labs and host of Breaking Banks). One Alex, two Jasons, diving into the latest fintech stories from the past month, without further ado. First up, the Synapse saga drags on—now with a former employee seeking D&O insurance to cover legal fees from a DOJ subpoena. Are criminal charges coming? And why is the DOJ moving so slowly? Given how much money has been unaccounted for this long, it's hard to believe there wasn't an effort to obscure it. Meanwhile, another fintech partnership, another small bank in trouble. Patriot Bank in Connecticut is facing serious regulatory problems with the OCC plus a rare “troubled condition” classification over BSA/AML failures. The bigger issue? Fintechs partnering with banks that can't handle risk; if you can't manage compliance, stay out of the game. In a positive turn, Ramp just launched Ramp Treasury. It's fintech's take on Chase treasury, but for startups and SMBs. With, by the way, limits on deposits, external transfers, and payments outside Ramp (very Apple-esque in its closed ecosystem approach). This FDIC-insured, high-yield account is making waves, but can fintechs really be able to crack the code in small business banking? Plus, we consider Chopra at the CFPB. He was supposed to be out on Day 1, but instead, he's suing Experian, pushing open banking, and cracking down on BNPL like a player taking last shots before the buzzer. At 12 years old, the CFPB is still finding its rhythm. Will it become a regulatory powerhouse, or remain caught in the shifting political tides? And yep, we rant about meme coins and gambling's grip on society (looking at you, PolyMarket betting on Zuckerberg's divorce). Join us! 00:01:18 - Return to BaaS Island 2.0 00:11:42 - Welcoming Ramp Treasury 00:16:49 - Chopra at the CFPB 00:23:10 - Can't Let It Go Sign up for Alex's Fintech Takes newsletter for the latest insightful analysis on fintech trends, along with a heaping pile of pop culture references and copious footnotes. Every Monday and Thursday: https://workweek.com/brand/fintech-takes/  And for more exclusive insider content, don't forget to check out my YouTube page.   Follow Jason (Mikula) #1: Newsletter: https://fintechbusinessweekly.substack.com/ LinkedIn: https://www.linkedin.com/in/jasonmikula/ Follow Jason (Henrichs) #2: Podcast: https://provoke.fm/show/breaking-banks/ LinkedIn: https://www.linkedin.com/in/jasonhenrichs/ Follow Alex:  YouTube: https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos LinkedIn: https://www.linkedin.com/in/alexhjohnson Twitter: https://www.twitter.com/AlexH_Johnson

The discussion highlights the potential for regulatory shifts, particularly around CRA and Dodd-Frank 1071, though changes may take 18-24 months. The conversation shifts to the unprecedented $3 billion penalty against TD Bank. In a press release from the  Department of Justice, Attorney General Merrick Garland said, "By making its services convenient for criminals, TD Bank became one."  The press release also said the TD Bank plea marked "the first instance of a U.S. bank pleading guilty to conspiracy to commit money laundering" and describes a situation in which "TD Bank faced systemic compliance failures, including inadequate internal controls, deficient transaction monitoring, and neglect of suspicious activity reporting, leading to extensive violations of BSA/AML regulations". The podcast underscores the importance of well-resourced and up-to-date compliance programs, as TD Bank's deficiencies highlight the consequences of prioritizing other objectives over regulatory obligations. As stated in the DOJ press release, Deputy Attorney General Lisa Monaco said, "Every bank compliance official in America should be reviewing today's charges as a case study of what not to do. And every bank CEO and board member should be doing the same. Because if the business case for compliance wasn't clear before - it should be now". Brought to you by GeoDataVision and M&M Consulting

In this episode of The Consumer Finance Podcast, Chris Willis discusses the complexities and potential pitfalls of bank-fintech partnerships. Joined by colleagues Alexandra Steinberg Barrage, Matthew Bornfreund, and Jesse Silverman, the conversation delves into the structure of banking-as-a-service (BaaS) relationships, regulatory pressures, and key friction points such as BSA/AML compliance and ledgering. The team offers practical solutions for both banks and fintechs to ensure successful collaborations, emphasizing the importance of clear roles, responsibilities, and robust compliance measures. This episode is essential listening for anyone involved in or considering a bank-fintech partnership.

While other industries are starting to explore the potential of AI, financial services has been using this technology for years. In many ways, they're ahead of the curve, since game-changing applications for AI and machine learning in fraud detection and BSA/AML are already broadly in use. In this installment of the podcast series, Shift: Moving Financial Services Forward, we ask what's next for AI in financial services, what's possible, and how do we get ahead of the curve again? Vikas Agarwal, financial services risk and regulatory partner at PwC, and Nicole Carrillo, managing director for financial services at Workday, discuss how firms can apply AI to their organization, address the trust gap, and drive revenue streams. https://blog.workday.com/en-us/2024/ai-for-financial-services-beyond-the-comfort-zone.html

BSA and AML...often the least engaging material in banking education but it doesn't always need to be nor should it be ignored. Justin Fischer is the CEO of RiskScout and doing some amazing work in the BSA/AML field with new and innovative ways to make this important area approachable and useful. Check them out at https://www.riskscout.com/ And many thanks to our sponsor, ICBA Securities, which you can find athttps://www.icba.org/icba-securities

The House Financial Services Committee has been investigating the possibility of the Federal Reserve creating a Central Bank Digital Currency. In this episode, hear experts unpack the nuances and implications of this idea during three hearings, and discover how you can play a part in shaping the future of American currency. Please Support Congressional Dish – Quick Links Contribute monthly or a lump sum via Support Congressional Dish via (donations per episode) Send Zelle payments to: Donation@congressionaldish.com Send Venmo payments to: @Jennifer-Briney Send Cash App payments to: $CongressionalDish or Donation@congressionaldish.com Use your bank's online bill pay function to mail contributions to: Please make checks payable to Congressional Dish Thank you for supporting truly independent media! Background Sources Recommended Congressional Dish Episodes Operation Choke Point Frank Keating. November 7, 2018. The Hill. House Committee on Oversight and Government Reform Staff. May 29, 2014. U.S. House of Representatives. Digital Asset Glass-Steagall James Rickards. August 27, 2012. U.S. News & World Report. Audio Sources September 14, 2023 Committee on Financial Services, Subcommittee on Digital Assets, Financial Technology and Inclusion Witnesses: Yuval Rooz, Co-Founder and Chief Executive Officer, Digital Asset Paige Paridon, Senior Vice President and Senior Associate General Counsel, Bank Policy Institute Christina Parajon Skinner, Assistant Professor, The Wharton School of the University of Pennsylvania Dr. Norbert Michel, Vice President and Director, Center for Monetary and Financial Alternatives, Cato Institute Raúl Carrillo, Academic Fellow, Lecturer in Law, Columbia Law School Clips 27:35 Rep. French Hill (R-AK): Look, the Constitution is clear. Only Congress has the authority to coin money and regulate the value of such money. And we've heard the same from Fed officials, right before this committee, and most recently from Vice Chair for Supervision, Michael Barr, who last week told an audience in Philadelphia and I quote, "The Federal Reserve would only proceed with the issuance of a CBDC with clear support from the executive branch and authorizing legislation from Congress." The Biden Department of Justice agrees, saying, quote, "there would be substantial legal risks to issuing a CBDC without such legislation." 32:05 Rep. Stephen Lynch (D-MA): CBDC is just one type of publicly issued digital dollar and would be issued, backed, and regulated by the Federal Reserve and have the full faith and backing of the US government. This could serve as an alternative to existing forms of payments and have a benefit, including instant payment settlement, provide a medium for cross border transactions, and foster greater financial inclusion. More than 130 countries have begun to explore their own government backed digital currencies. China, Russia, Saudi Arabia and India have already commenced pilot programs, and a digital Euro pilot could be launched as early as 2028. Meanwhile, the US remains far behind amid increasing and blatant information about features of digital currency. While concerns about data privacy and government surveillance are real, especially in countries that do not respect human rights and privacy, a CBDC does not have to be designed that way. We could employ an architecture that would protect personal data while including anti-money laundering and terrorist financing features. 33:15 Rep. Stephen Lynch (D-MA): It is counterintuitive that my colleagues should be raising concerns about data privacy while thousands of private companies, domestic and foreign, are surveilling, aggregating, and selling consumer data each and every day. 33:45 Rep. Stephen Lynch (D-MA): I'm announcing and inviting my colleagues to join the Congressional Digital Dollar Caucus. This forum will educate members on critical issues relating to the development, design, and potential implementation of a government issued digital dollar. I plan to invite innovators, technologists, academics, and other experts to share their findings and development. I hope my colleagues will join me in this exploration. 34:15 Rep. Stephen Lynch (D-MA): The use of anonymous cash has plummeted and more of our transactions are occurring online and under surveillance, tracked and aggregated by financial services companies. Indeed China has turned that fact into a tool of full spectrum surveillance of its citizens. This is why I've introduced the Ecash Act. This bill directs the Treasury to design and pilot a digital version of cash and would complement the Fed-issued CBDC. It would allow individuals to make instant peer to peer payments with no consumer data or transaction tracking and without the use of a bank account. 36:10 Rep. Tom Emmer (R-MN): The need to protect Americans' right to financial product privacy is at an all time high. That's why I introduced the CBDC Anti-Surveillance State Act with over 50 of my colleagues. This bill prevents unelected bureaucrats from creating a tool for financial surveillance if not open, permissionless, and private, like cash, a CBDC is nothing more than a CCP-style surveillance tool that will oppress the American way of life and we're not going to allow that to happen. 38:20 Dr. Norbert Michel: In my testimony, I argue that the United States should not launch a Central Bank Digital Currency, a CBDC. Advocates for a CBDC tout many potential benefits, but there's nothing unique about the technology that would provide those supposed benefits. 39:00 Dr. Norbert Michel: A CBDC in any form would be a direct liability of the central government, a digital tether to its citizens such that it would radically alter the existing public-private relationship that already exists in our monetary arrangement. 39:25 Dr. Norbert Michel: First, issuing a CBDC would not help preserve the status of the United States dollar, it would likely damage it. Proponents argue that because China has launched a CBDC, the United States must keep up by launching its own. Others make the narrower claim that the US must launch a CBDC to keep up with broader technological changes in the payment sector. But anyone who chooses to do so can transact digitally in U.S. dollars right now. The CBDC does not take us from a world with zero or a few digital transactions to one filled with digital transactions. Moreover, the dollar's renowned status is owed to the strength of the American economy and its legal protections for private citizens relative to many other countries. Unlike in many other places, Americans do not have to live in constant fear that the government will take their money. However, if the US creates a CBDC, anyone who wants to use the dollar would lose a layer of protection from that type of government abuse. 40:30 Dr. Norbert Michel: The second myth is that a CBDC would expand financial inclusion by providing a new source of financial services for America's unbanked and underbanked populations. Again, though, this is not a technological problem. In other words, the CBDC itself does not accomplish this goal. The private sector already enables us to transact digitally, and it has been steadily shrinking the number of Americans without financial services for years. We also know, because the FDIC asked them, that unbanked and underbanked Americans primarily are in that situation because either they don't have enough money to have an account, or they don't want to give their personal information to a bank or the government. And what should be obvious is that a lack of sufficient income is a much broader economic problem than a CBDC or financial service technology. While some proponents argue that a CBDC lowers the cost of providing financial services, that's true only if the government subsidizes those costs or chooses to waive the same level of regulatory scrutiny it requires of private firms. And that level of scrutiny, it turns out is more than just a costly mandate that the government has placed on private firms. It's also the one that causes those unbanked Americans to say they don't trust banks. It's also the same one that requires people to hand over their personal information to private companies, and as a result potentially to the government. If the government removes that mandate for all financial service providers, there would be no cost advantage to a CBDC. 42:05 Dr. Norbert Michel: That brings me to my last myth, the idea that a CBDC could somehow enhance financial privacy. Currently, Americans are forced to hand over personal information to financial institutions. Those institutions are required to track transactions, and the government can access that information without a warrant. The fourth amendment is supposed to protect Americans from the government gaining access to this kind of information, unless they show probable cause and obtain a warrant. But it no longer protects Americans when it comes to financial information. And the only buffer left is that the government must go through the financial institution to obtain that information. Introducing a CBDC would remove this last layer of protection. It would place all financial transactions either in a government database or leave them a keystroke away. 44:15 Paige Paridon: We believe that at this point there is little evidence that a CBDC would bring measurable benefits to the US economy or consumers. Furthermore, a CBDC could upend the commercial banking system and create financial instability. 44:30 Paige Paridon: CBDC can take one of two general forms: a wholesale CBDC, which would be used only by financial intermediaries, and a retail CBDC, which could be used by consumers and businesses. To date, most research and attention has been focused on a retail, intermediated, account-based model in which consumer's CBDCs would be held in an account at a bank or another financial intermediary, like an asset held in custody. The CBDC could not be used by the bank to make loans in the way that dollar deposits are used today. Any transfer of $1 deposit from a bank to a CBDC is $1 unavailable for lending to businesses or consumers. By attracting deposits away from banks, a CBDC likely would undermine the commercial banking system in the United States and severely constrict the availability and increase the cost of credit to the economy. 46:30 Paige Paridon: With respect to financial inclusion, a review of the reasons why certain individuals are unbanked makes it clear that a CBDC would be unlikely to meaningfully increase financial inclusion. For example, FDIC data reveals that many respondents are unbanked because of privacy concerns, and intermediated CBDC is unlikely to mitigate those concerns, given that it would presumably come with the same know-your-customer requirements that currently apply to banks. 54:35 Christina Parajon Skinner: So privacy rights are the clearest place to start. Today, individuals can enjoy comprehensive privacy in their payments transactions by using cash. Now, although most central banks have suggested that CBDC is not going to replace cash, that near-term promise can't be guaranteed over the longer term, and the insinuation that CBDC is necessary or inevitable seems motivated by a view that cash will eventually become obsolete. But because central banks don't have the technology presently to offer cash-like privacy, a digital currency -- unless it's radically redesigned -- will bring with it the ability for the state to monitor or surveil its citizens' payments activity. 55:20 Christina Parajon Skinner: I'd like to focus on the impact of a CBDC on the Federal Reserve. Certainly since 2010, the power and authority of the Fed has grown considerably, and Congress's responsibility to oversee the Fed requires it to understand how a CBDC could further empower the central bank but also how it might weaken it. On the one hand, CBDC could result in a larger central bank balance sheet. Issuing CBDC would increase the liability side of the Fed's balance sheet if the total of bank reserves, repos, and cash balances largely remained unchanged. So if the liabilities with CBDC increase, so too much the Fed's assets. The Fed could buy more Treasury securities to match CBDC, but that could possibly invite pressure on the Fed to issue more CBDCs to in turn absorb more government debt. And overall, that dynamic could further erode the limited fiscal discipline that we have remaining. A CBDC could also affect the Fed's independence in the way that it would establish a direct relationship between the central bank and the real economy for the first time in history. One result of that relationship would almost certainly be the further erosion of the line between monetary and fiscal policy. When central banks begin to issue liabilities directly to the people, it will become much more difficult for the central bank to justify their provision of liquidity to banks and the financial system, as opposed to households, especially during a crisis. And effectively this could open the door to political pressure on the Fed to provide liquidity assistance to households during turbulent economic times. But these sorts of household level interventions would radically transform the central bank and its purpose and role within society. 57:40 Christina Parajon Skinner: So it does not inherently improve financial inclusion unless it's paired with accounts for all citizens, which the central bank itself has already recognized as infeasible. 59:15 Raúl Carrillo: Today, I support the call for a digital dollar system, including CBDC, Fed accounts, and Ecash. 1:02:15 Raúl Carrillo: Indeed, the only way to evolve beyond the surveillance status quo is to establish a direct digital dollar interface with consumers where the Fourth Amendment and other protections may actually apply. If we truly care about privacy, we should treat the banking and blockchain industries' appeals to partnership as suspect, based on legal and technological grounds alone. We can build a retail CBDC and Fed account system with superior protections compared to what exists now and superior protections to the systems that are being built around the world currently. 1:02:50 Raúl Carrillo: So today I also advocate for the inclusion of digital cash, as detailed in the Electronic Cash and Hardware Security and Secured Hardware Act, the Ecash Act, re-introduced by Representative Lynch. Today, Ecash devices available on a smart card or a phone card would serve as digital counterparts to cold hard American cash. These devices would not make payments over the internet. Instead, they would store Treasury issued digital dollars on card hardware to enable everyday small dollar transactions for everyday people. These transactions would be subject to the BSA/AML regime, and as a boon to law enforcement, we can set privacy-sensitive security controls and caps on transactions and usage. However, the cards would in no instance be capable of generating data that companies and agencies can abuse. We preserve a place for privacy within public infrastructure. The Ecash Act harkens back to the past to the days when President Lincoln established the banking and cash system that we still use today. And it also harkens to an exciting, inclusive, safe digital future. 1:08:05 Paige Paridon: CBDC, because it would be a direct liability of the central bank, it would be perceived as the ultimate safe asset. So from that perspective, particularly during times of economic stress, it could attract depositors to pull their money out of the banking system to flee or run to a CBDC if there was perceived concern about the banking system or the financial system overall. So every dollar that currently resides in a bank account can be deployed for useful purposes in the economy, primarily through lending. Every dollar that is pulled out from the banking system and put into a CBDC is one less dollar that could be put to good economic use. And that is why we have a fundamental concern with a retail CBDC, given the flight-to-quality risks. 1:09:35 Rep. Maxine Waters (D-CA): 130 countries, representing 98% of the global economy, are now exploring digital versions of their currencies, including the United States. Almost half of these countries are in advanced development pilot or launch stages of their CBDCs. Can you discuss how CBDCs may shape the future global financial landscape? What would it mean for the United States if we instead chose to stay on the sidelines of this race? Raúl Carrillo: Thank you very much for the question, Representative Waters. My opinion is that it is incumbent upon the United States to provide leadership with respect to an inevitable process that is going to occur across the world. It is clear that we're all moving to digital fiat currency. The question is what sort of protections are going to attend digital fiat currency? 1:12:35 Raúl Carrillo: I hear a lot of concern across the political spectrum in this committee about the power of Silicon Valley. And if you do not create an alternative to the corporate systems that collect data, or promise to protect it and then collect it en mass, which is even worse and common in the blockchain industry, then what is going to happen is that Silicon Valley is going to win. And frankly, I don't think anybody here wants that. But in order to preserve the space that we have for public money and not make it a big tech enterprise, we, in fact, have to move forward with digital fiat currency. 1:13:50 Rep. Warren Davidson (R-OH): One of the key characteristics of sound money is that it facilitates permissionless, peer-to-peer transactions like cash. Currently, of the 100+ countries developing a central bank digital currency, none of them are developing a permissionless system. Every one of them is developing a permission system, including the United States Federal Reserve. So when we talk about permissions, we can kind of get something from the Federal Reserve's own report of that. They said in their report that it should be privacy-protected, intermediated, widely transferable, and identity-verified. Mr. Michel, Professor Skinner, in your view, is it possible to be both privacy-protected and identity-verified? Dr. Norbert Michel: No, in my view, it's not. Once the information is in a system, it's in a system and somebody is going to get it and it's going to get out. And I just quickly really want to say I'm very happy to hear everybody here on the panel is pro-Fourth Amendment. The problem, of course, as you know, is that the Bank Secrecy Act, and the anti money laundering regime runs right over the Fourth Amendment. So that's what needs to be fixed. Rep. Warren Davidson (R-OH): It's already a problem in third party hands, but this wouldn't even be in third party hands. But, you know, Professor Skinner, what's your view? Christina Parajon Skinner: My view is no, that that's not possible right now, and central banks have essentially admitted as much. And to the extent such technology is or could be under development, it's extremely immature. And I think the point to emphasize here is that inherently there will be a tradeoff to the extent central banks create CBDC, between identity verification and privacy. And more than likely central banks will always choose identity verification because they will never feel comfortable sacrificing the national security goals that they see as accompanying robust identity verification. 1:24:35 Rep. John Rose (R-TN): Decisions in United States v. Miller and Maryland v. Smith gave us the third party doctrine. Under that doctrine. if you voluntarily provide information to a third party, the Fourth Amendment does not preclude the government from accessing it without a warrant. Dr. Michelle, can you explain how the third party doctrine has impacted Americans' financial privacy? Dr. Norbert Michel: Yes, they practically have none at the moment partly because of this. But I also want to clarify, because of something that was just said on the panel. The Fourth Amendment is the one that amends the Constitution to the United States, which protects American citizens from the government. So this is exactly the issue and it was brought up in the cases in the 70s, when the Bank Secrecy Act was challenged. If the Bank Secrecy Act were not there, the banks and financial institutions that we have would not be required by the government to collect the data that they are, that is a requirement in the Bank Secrecy Act. And everybody can go back and look at those cases, that was always an issue as to whether this was constitutional and in violation of possibly the Fourth Amendment. So between the combination of the Bank Secrecy Act, the Fourth Amendment issues, and the third party doctrine, Americans, although many of them don't realize it, have very little financial privacy at the moment. 1:26:05 Rep. John Rose (R-TN): How would the adoption of a CBDC further erode Americans' reasonable expectation of financial privacy? Dr. Norbert Michel: I believe it would remove the last layer that we have, quite simply, instead of having to go through the financial institution, the government would have that information either in a central database or a keystroke away. 1:31:05 Raúl Carrillo: We envision hardware devices. So those can be cards, similar in size to an existing debit or credit card, or they can be secured SIM cards, or something like it, on a phone that would enable hardware based transactions and for people to make payments as they do today with paper cash for everyday things without fear of government or corporate surveillance, which occurs in tandem when we use digital payments today. 1:32:20 Raúl Carrillo: I would clarify that the point of Ecash is that it does not operate online. It is actually open, permissionless, and private, in the sense that you don't need a blockchain or a banking intermediary. 1:35:45 Rep. Bryan Steil (R-WI): In your testimony you wrote, "any transfer of $1 deposit from a commercial bank or credit union to a CBDC is $1 unavailable for lending to businesses or consumers." Can you expand a little bit on that statement about how an adoption of an intermediated CBDC would impact credit availability and the cost of banking services? Paige Paridon: Sure. Happy to, thank you. So I think there's a misconception generally, that $1 transferred from a deposit account to a CBDC would mean that CBDC would still be able to be used for lending and investment in the economy the way that dollar deposits currently are now. And that is not the case of CBDC, even if intermediated. In other words, even if the services including onboarding and other services that commercial banks currently provide, even if those services were provided by banks with respect to a consumer's CBDC, the fact is the bank would really only hold that CBDC in the same manner it holds an asset in custody. So it would have to essentially keep that CBDC under the proverbial mattress and it would not be able to be redeployed in the form of loans. 1:41:20 Paige Paridon: If it was an intermediated CBDC, banks would essentially hold CBDC as a custodian. That's right, they wouldn't be able to lend out some portion of the CBDC as they do deposits. 1:42:10 Rep. Sean Casten (D-IL): If you had 100%, CBDCs was all the money supply, you'd have no lending, right? So doesn't any proportional increase in the amount of a CBDC in an economy shrink the economy? Paige Paridon: Well, there could be shifts to other forms of ways to fund lending. Banks could borrow in the wholesale markets, they could potentially borrow from the Federal Reserve. So I'm not necessarily sure it's a one-to-one relationship. 1:46:25 Rep. Mike Flood (R-NE): Ms. Skinner, in your testimony, you mentioned how a CBDC could lead to the Federal Reserve's independence being threatened. Can you speak more on that? Christina Parajon Skinner: Yes, certainly. Thank you for the question. So in the first instance, to the extent the Federal Reserve doesn't change the composition of its balance sheet otherwise, issuing a CBDC will increase its liabilities, which means that it has to match that increase in liabilities by purchasing more assets. So the first thing that we would think about when the Fed would purchase more assets would be buying more Treasury securities. That being said, with the potential for the Fed to issue more CBDC, thereby giving it more headroom to buy more Treasury securities, would be likely to put some pressure on the Fed at some point down the line from the Treasury to issue that CBDC to absorb more government debt, which we call monetary finance or monetizing the deficit. Before World War Two, the Fed essentially operated under the thumb of the Treasury so that during wartime and otherwise, the Fed could effectively monetize the deficit. And really today, that's anathema to an independent central bank. There were other things that the Fed could also be pressured to buy to match an increase in CBDC, like corporate bonds. Now our recent experimentation in corporate bonds has put some question around whether this too could politicize a central bank because inevitably if central banks buy corporate bonds, they are picking winners and losers in the economy. Now, the Fed has been pretty neutral in its approach, but there has been a lot of pressure on the central bank to, for example, buy green bonds in order to facilitate a transition to a low carbon economy and certainly other central banks do actively green their corporate bond portfolios. 2:23:05 Dr. Norbert Michel: I believe this is a question of centralization versus decentralization. And if you have a CBDC, you ultimately have one major point of failure. One way of doing this would be to have the Fed have a database. Well, we know the Fed's been hacked. Even if the Fed has multiple databases, it's the Fed being hacked, as opposed to having multiple private companies all across the country. If Capital One, for example, has a hack or a cybersecurity problem, everybody in the country is not immediately at risk, only their customers, and that's a problem for them. 2:25:25 Rep. William Timmons (R-SC): Based on your research, can you explain what, if any, technological advantage a CBDC has over the private sector? Dr. Norbert Michel: None. And this should be this is properly viewed as a government reaction to a private innovation. We can call it Bitcoin or you could just call it distributed ledger technology in general. That's what this is about. This is about the government seeing an innovation that possibly threatens their control over the payment system and it is a movement to come up with something that takes that back and it just so happens that what they're coming up with here is something that goes even further than where we are without the CBDC. 2:26:45 Christina Parajon Skinner: The status of the dollar is undergirded by our commitment to the rule of law, democratic institutions, having a judiciary that enforces property rights, and perhaps most importantly, maintaining the dollar as a stable store of value. So for there, it's important that the Fed maintain its fight against inflation and with the issuance of the CBDC, there will absolutely be a propensity to over-issue, to for example, monetize the deficit and if that were to happen that would undermine the status of the dollar. 2:29:45 Paige Paridon: A so-called flight to quality is something that we fear would be almost inevitable. Were a retail CBDC to be issued by the Federal Reserve, in times particularly of financial stress or instability, a CBDC would be viewed likely as the ultimate safe asset and depositors would likely be incentivized to pull the deposits out of the banking system and put them into CBDCs as a safe asset, which would reduce the availability of deposits available to lend out, and moreover, increase the cost of credit. 2:31:10 Raúl Carrillo: President Lincoln created cash after the Civil War in order to help everybody have day to day transactions throughout our economy. Today we have cutting edge technology in various other sectors in the government, including in the US military where they use stored value cards known as Eagle Cash in order to make offline payments. 2:33:15 Yuval Rooz: If the US government were to decide to issue a retail CBDC, unlike wholesaled CBDC, I think that it is going to be critical for the government to show an evidence that there is no ability for the government to see transactions of citizens. I personally would be against such an act. 2:35:05 Yuval Rooz: If we wanted to have privacy included in the smart contract of the money, it would state that any movement of money would only be visible to the sender of money and the receiver of money for example, and the issuer of money would be blinded. So all that the issuer would see is the overall balance, but would not see any underlying movements of the money, for example. March 8, 2023 House Financial Services Committee Witnesses: Jerome Powell, Chair, Board of Governors of the Federal Reserve System Clips 53:50 Rep. French Hill (R-AK): Turning to a topic that's been a subject here for nearly four years: Central Bank Digital Currencies. Article One of the Constitution, reserves coins and money issuance to the Congress and we've in turn delegated that to the US Treasury, which has since 1912 engaged the Federal Reserve as their fiscal agent. You've testified here many times before that to issue a Central Bank Digital Currency that would be have to be authorized by statute by Congress. Is that still your testimony? Jerome Powell: So that is absolutely the case as it relates to a retail CBDC. There are potential forms of a wholesale CBDC that you would need to look at, it's less clear. But we've always been talking about retail CBDC and that's something we would certainly need Congressional approval for. Rep. French Hill (R-AK): What would be a parameter on something that's not a retail CBDC where you think that could be issued in some form or fashion without Congress's direct statutory authorization? Jerome Powell: It would be, for example, something between banks, so it would look an awful lot like a bank reserve. And you might ask, Well, why would we need it? And that's a really good question, too. But just something that's literally within a wholesale market. Rep. French Hill (R-AK): But that speaks that you might have a blockchain between banks and the Fed using a Central Bank Digital Currency token to settle transactions institutionally inside the US. 1:15:40 Jerome Powell: We did go out for comment in general on a CBDC a year or so ago and I do expect that we'll go out, I can't give you a date, but we'll certainly go out and we engage with the public on an ongoing basis. We're also doing research on policy and also on technology. That's what we're up to. Rep. Stephen Lynch (D-MA): The Boston Fed has a partnership over there with the folks from MIT Media Lab, they're doing a great job, but it says here that the discussions would include technical experimentation. I was just wondering, at what level are you talking about making decisions on architecture for a retail CBDC? Jerome Powell: We're not at the stage of making any real decisions. What we're doing is experimenting, in kind of early stage experimentation. How would this work? Does it work? What's the best technology? What's the most efficient? We're really at an early stage but we're making progress on sort of technological issues. The policy issues are equally important though. You know, we haven't decided that this is something that the financial systems in the country want or need. So that's going to be very important. 1:18:15 Jerome Powell: A CBDC is going to be years in evaluation. 1:18:30 Rep. Stephen Lynch (D-MA): You know, before the greenback, everybody had their own currency. You know, you had rail rail companies, you had coal companies, you had, you know, state banks that were authorized to issue their own currency. But when the greenback came out, all of those various currencies went to zero, because the greenback had the full faith and credit of the United States behind it. I'm worried about a lot of these Stablecoins and other cryptocurrencies. Do they go to zero when we come up with a CBDC that has the full faith and credit of the United States behind it? We've got 1000s of these out there, and you've got people investing millions and millions of dollars, well trillions right now. And I'm just thinking if we had those advantages built into a CBDC? Wouldn't those alternatives go to zero, if they did not have the transparency and the full faith and credit that we enjoy? Jerome Powell: So certainly, unbacked cryptocurrencies that don't have any intrinsic value, but nonetheless, trade for a positive number, I've never understood the valuation of those. Stablecoins, many of them are really drawing on the credibility of the dollar. They're dollar denominated mainly, dollar-based reserves, although we don't know what's in the reserves because there's no regulation. 2:16:05 Jerome Powell: What we say about permissionless blockchains is that they have been vehicles for fraud -- Rep. Warren Davidson (R-OH): 0.24% if you follow your own report on fraud. It's a fraction of what it is with the US dollar. May 26, 2022 House Financial Services Committee Witness: Lael Brainard, Vice Chair of the Board of Governors of the Federal Reserve System Clips 2:08:30 Rep. John Rose (R-TN): Vice Chair Brainard, we saw how dangerous it can be when the government weaponizes the financial system for political purposes under the Obama administration's Operation Choke Point. More recently, the Canadian government instructed banks to freeze accounts linked to the trucker protests over vaccine mandates. Vice Chair Brainard, without appropriate safeguards, would a CBDC make it easier for the federal government to block individuals it disagrees with from accessing the financial system? Lael Brainard: So I really don't see CBDC as raising questions that are different from deposits and bank accounts, for instance. And the paper that was released in January, in particular, talks about an intermediary model, akin to what we see with commercial bank deposits, where the central bank doesn't have any direct interaction with consumers, doesn't see transactions by consumers, but there are intermediaries and, very importantly, including banks that would be responsible for both identity verification and for keeping that transaction data private. So in that sense, I don't see it it's as really any different than the issues that are raised with commercial bank deposits. June 16, 2021 Committee on Financial Services, Subcommittee on National Security, International Development, and Monetary Policy Witnesses: Eric B. Lorber, Senior Director, Foundation for Defense of Democracies Clips 43:33 Eric Lorber: The number of transactions which are elicit that use Bitcoin or blockchain technology is actually fairly low percentage wise it's in I believe, below 1% or somewhere around there. So it's fairly small. Music by Editing Production Assistance

Jonathan Lopez joins John to discuss the state of corruption, how prosecutors see their cases, advice for BSA/AML officers to avoid personal liability, and other white collar issues.

In this podcast episode, Len Suzio and Dean Stockford discuss the unregulated use of Artificial Intelligence (AI) in the banking industry. Dean brings up how, amidst the focus on fair lending and Unfair, Deceptive, or Abusive Acts or Practices (UDAAP), there have been increasing concerns about potential bias in AI systems. Specifically, red flags have been raised about scoring systems built into the lending process and the potential for inadvertent redlining in marketing systems. Both Len and Dean concur on the importance of understanding and regulating the use of AI in banking systems. Dean suggests several proactive measures for financial institutions (FIs) in anticipation of regulatory exams. He recommends conducting an enterprise-wide inventory of all AI-utilizing systems and understanding their specific applications, starting with BSA/AML and Fraud departments, followed by Lending/Underwriting, Marketing, and Human Resources. In addition, he urges FIs to conduct fair lending data analyses and risk assessments with specific emphasis on AI in lending/underwriting systems. To conclude, Dean emphasizes the need for management to understand underwriting systems through thorough testing and analysis, and document vendors' explanations and testing results, to gain a comprehensive view of the risk these systems pose to their institutions. Brought to you by GeoDataVision and M&M Consulting  

The report examines the vulnerabilities in DeFi, including potential gaps in the United States' Bank Secrecy Act/anti-money laundering regulatory, supervisory, and enforcement regimes for DeFi. We first discuss how Treasury defines DeFi, the report's findings regarding the use of DeFi services in the process of transferring and laundering illicit proceeds, the BSA's application to DeFi services and the impact of decentralization on BSA coverage, and the report's recommendations. We then discuss state efforts to regulate digital assets and federal enforcement actions against cryptomixers, including the challenge to OFAC's authority. We conclude with a discussion of the focus of state regulators on BSA/AML policies and procedures and steps businesses in the digital asset space can take to mitigate compliance risk. Alan Kaplinsky, Senior Counsel in Ballard Spahr's Consumer Financial Services Group, leads the conversation, joined by Lisa Lanham, a partner in the Group, and Peter Hardy, a partner in and Co-Leader of the firm's Anti-Money Laundering Group.

Hey all, Jason here.I recently partnered with Cable's Chief Product Officer Katie Savitz to present a Masterclass at the Empire Fintech Conference during NY Fintech Week. We profiled six recent developments impacting Banking-as-a-Service and how stakeholders can use technology to respond.If you weren't able to attend (or just need a refresher!), this podcast/post combo is for you!(And extra great timing, as Cable today announced it raised an $11M Series A to automate effectiveness testing of financial crime controls!)Six Key Developments in Banking-as-a-ServiceThe U.S. banking system is experiencing its greatest stress since the 2008 Great Financial Crisis and regulators are seeking to address risks being revealed. BaaS may make the banking system more resilient, but it also introduces new risks. Six recent developments shed light on how BaaS may evolve going forward.* OCC Office of Financial Technology. One explicit mandate of the OCC's Office of Financial Technology – recently formally established and led by Prashant Bhardwaj – is to support “high-quality supervision of bank-fintech partnerships,” which portends continued regulatory scrutiny, but also opportunity for industry engagement with regulators.* OCC 2023 Bank Supervision Operating Plan. Further signaling the OCC's increased focus on BaaS, the agency's 2023 supervision operating plan calls for specific focus on third-party risk management and highlights BSA/AML risk.* Acting Comptroller Hsu 2022 TCH+BPI Conference Remarks. Acting Comptroller Hsu's speech specifically addressed the growth of BaaS operating models. Hsu expressed concern about the growing complexity associated with BaaS and reiterated the primacy of “safety and soundness” concerns, while acknowledging opportunities from technological innovation.* November 2022 U.S. Treasury Department Report on Non-Bank Firms in Consumer Finance Markets. The Treasury Department report specifically flagged “new risks to consumer protection and marketing integrity” from fintechs and called for enhanced supervision of bank-fintech partnerships.* CFPB Invokes Dormant Authority to Examine Non-Bank Companies. While the CFPB is focused first and foremost on consumer protection, it has shown a willingness to use its authority to supervise non-bank entities that may pose a risk to consumers, potentially including non-bank fintechs and platforms.* OCC-Blue Ridge Bank Agreement. The OCC's formal agreement with Blue Ridge – arguably the first major BaaS enforcement action – provided a wealth of detail about regulatory scrutiny of risks in bank-fintech partnerships, and areas of financial crime compliance tech stacks that may need uplifting.Increasingly, growth and innovation in the banking industry is happening outside the banking regulatory perimeter and, for BaaS-focused banks, asset size is no longer a good reflection of risk.With the sector's growth now attracting more regulatory attention, to survive, all stakeholders need to adapt.The era of banks onboarding fintechs with little to no insights is finished.For bank-fintech partnerships to be sustainable, they must be done in compliance with regulatory requirements. While the knee-jerk response is to throw bodies at the problem, this not only is an expense, but also has scalability limitations. Instead, a new approach enabled by new technology is needed to make these partnerships not only possible, but profitable.The Compliance Problem for BaaSRapid customer growth and disaggregated responsibilities are primary drivers of compliance breakdowns. Both factors are especially prevalent in BaaS.In BaaS, compliance teams used to managing one institution and their own direct customer pool now have to deal with multiple fintechs, each with their own controls and indirect customer pools.This demands a whole new level of compliance capabilities. Many banking providers still rely on legacy systems and manual processes, but those are no longer fit for purpose.As a result, regulators are already focused on this question for bank-fintech relationships: Who is responsible for what when things break?The Fincrime Tech Stack & Why Effectiveness MattersOver the last decade in BSA/AML compliance, banks and fintechs have added more controls, with little idea about how effective they are. Over $270 billion is spent worldwide each year on financial crime compliance, with the majority of that spent on people.Despite this spending, less than 5% of accounts are tested to understand effectiveness. If banks can't even be sure how effective their own controls are, how can they do that for their fintechs?But this same exact approach is being used in BaaS – partner banks are adding more fintechs with little idea how effective their controls are, even as the compliance challenges multiply.Increasingly, regulatory pressure is demanding that you be able to “show, not tell” that your program is effective. Compliance teams need to ask: What part of your tech stack helps you answer questions about effectiveness?In BaaS, technology solutions for oversight, monitoring, and assurance are essential. For banks, how do you know everything is working at all levels across their fintechs? And for fintechs, how do you reassure bank partners everything is fine?How can you understand risk better?The first key compliance task in BaaS is understanding risk better: banks' own risk, fintechs' risk, and how fintech risk impacts banks' risk. Below are practical tips and steps to achieve this:Bank risk* Review your own risk assessment more than annually, as circumstances can change quickly in BaaS.* Update your risk assessment when control failures are discovered, so that you can discuss priorities with senior management.* Leverage available risk assessment technology solutions to get out of spreadsheets and onto a smarter platform with better workflows.Fintech risk* Banks should require fintechs to perform a risk assessment using the same methodology and should collect standard information and documents from each fintech, in order to compare and understand risk across the bank's fintech portfolio.* Fintech risk assessments should also be easily updated for changes in circumstances at the fintech level.* Consultants can provide templates and methodologies, and technology platforms can help with document collaboration. Cable also offers the ability to collect company information and documents, and conduct the same risk assessment for each fintech.Bank and fintech risk* Banks should incorporate their fintechs' risk into the bank's own risk.* Banks also need to understand how each new fintech affects their current risk profile and any impacts to their risk appetite.* Some compliance teams have built out complicated spreadsheets with the help of consultants to do this. Cable also offers the ability to roll up fintechs' risk assessments into a bank's risk assessment.How can you improve oversight and monitoring?The second main compliance task in BaaS is oversight and monitoring of controls. Below are practical tips and steps to improve these processes:Identify controls* Banks and fintechs should have a shared understanding of the controls in place at each fintech.* Banks should request a controls register as part of standard onboarding documentation collection from fintechs.Assess control effectiveness* To the effectiveness point, partner banks must sufficiently monitor and test accounts to understand how all the controls are working at the fintech level.* Key questions to address include: What data is needed by the bank to conduct oversight? How will data be sent or received timely, and in what format? If supplemental data or information is needed, how will the bank get that promptly? What do each of the bank and fintech need to do to facilitate data sharing?* Both banks and fintechs need to have a team and technology to handle this monitoring, especially as the bank's fintech program scales.* Technology like Cable offers automated oversight and assurance processes to identify regulatory breaches and control failures in real-time across each fintech.Fix and report issues* Banks and fintechs need to quickly remediate and report any issues, promptly after they happen instead of finding issues months later in periodic audits.* Banks and fintechs should ensure they have shared issue management tools that give visibility to both sides, as fintechs will most often remediate issues.* Banks and fintechs should define roles and responsibilities, and have shared understandings of issue prioritization, so the right issues receive proper attention.BaaS is here to stay, but operational work will overwhelm banks and fintechs unless automated effectiveness testing becomes commonplace. Partner banks need to deeply understand their requirements and deploy technology solutions to enjoy the trifecta of full compliance, resource efficiency, and fast onboarding to grow their fintech programs.Existing subscriber? Please consider supporting this newsletter by upgrading to a paid subscription. New here? Subscribe to get Fintech Business Weekly each Sunday: Get full access to Fintech Business Weekly at fintechbusinessweekly.substack.com/subscribe

After reviewing how the AMLA expands the BSA's goals, we look at which AMLA provisions have the most impact on BSA compliance, including the AMLA's emphasis on information sharing, the Financial Crimes Enforcement Network's “national priorities” and the value of threat pattern and trend information to bank compliance efforts, and the AMLA's expansion of the U.S. government's authority to subpoena information from foreign financial institutions that maintain correspondent banking relationships with U.S. banks. We also review the CTA's new beneficial ownership reporting requirements and discuss how they interact with existing customer due diligence (CDD) requirements and the need to align CTA and CDD regulations. Peter Hardy and Terence Grugan, Ballard Spahr partners and co-leaders of the firm's AML Team, host the conversation.

Webcast URL: https://knowledgewebcasts.com/know-portfolio/bsa-aml-enforcement-trends-cle-2022/ In response to a prevailing view that the US was becoming a haven for money laundering, as well as emerging risks posed by advances in financial technology and the advent of virtual currencies, Congress passed the Anti-Money Laundering Act of 2020 (AMLA 2020) as part of the National Defense Authorization Act. AMLA 2020 represents the most significant changes to federal anti-money laundering legislation since the passage of the Patriot Act in 2001. Within this expansive new legislation is the Corporate Transparency Act, which created the framework for a nationwide registry for beneficial ownership. AMLA 2020 also created new mandates for reporting and record-keeping, expanded subpoenas of U.S. law enforcement, and enhanced the role of whistleblowers in detecting and reporting financial crime. These enhancements to existing anti-money laundering laws will force financial institutions to remain vigilant while increasing the compliance requirements for market “gatekeepers” previously unaffected by AML laws. Join a panel of key thought leaders and professionals assembled by The Knowledge Group as they delve into an in-depth analysis of the significant reforms proposed in AMLA 2020. Speakers will also provide comprehensive guidance on how to respond to these enhanced regulatory requirements. For any more information please click on the webcast URL at the top of this description.

In this episode of CHATTINN CYBER, Marc Schein interviews Maria T. Vullo, Founder, and CEO of Vullo Advisory Services, PLLC, a strategic advisory firm. She serves on several for-profit boards, is Regulator-in-Residence at the Fintech Innovation Lab, and an Adjunct Professor at Fordham Law School. She was formerly the New York's Superintendent of Financial Services, responsible for managing a 1,400 person regulatory agency that supervises New York's banking and insurance industries. Maria has extensive banking and insurance regulation expertise, BSA/AML compliance, an understanding of cybersecurity and data privacy, fintech and insurance, and strategic litigation. In today's episode, Maria discusses her insightful career in DFS, working in private law and consulting practice later. She shares her experience working with private and public sector institutions and how both have added to her expertise in the law. Maria talks about finalizing the DFS Proposed Regulations Part 500 (Cybersecurity Requirements for Financial Services Companies) in 2017 and its significance. Not only was it a big deal in cyber, but it was the first in the nation at that time and is still a leading force in cybersecurity regulations. Maria adds that DFS has a huge responsibility in helping manage cybersecurity risks. It is responsible for the safety and soundness of all the banks and insurance companies that are state-chartered. Since any cyber risk could also create a potential financial risk to them, the DFS had to take steps to consider cybersecurity seriously. The government plays a huge role in combating cyber risk or ransomware. After the 'SolarWinds hack', the largest global cybersecurity attack that happened recently, the federal agencies and governments passed a pervasive executive order asking all private and public agencies to bring a unified approach to handling cybersecurity issues. The New York State Department of Financial Services (NY DFS) recently issued new Ransomware Guidancefor regulated companies to prevent successful ransomware attacks. This happened post realizing that 74 of their regulated institutions had suffered ransomware attacks, 17 of which needed to be paid the ransom. We also discuss the world of FinTech pre and post COVID and why insurance suffered in these times. Maria explains that in financial services, consumer protection will be a big issue for the Biden administration. Virtual currency is another central area of regulation considering its global reach. Maria closes the conversation by stating the massive role of cybersecurity protection in enabling cyber insurance. It will continue to grow in importance in the coming years! Quotes: “If you have a significant cyber cybersecurity attack, that's a financial attack and you have a ransomware attack that stops your business, has a huge impact, if not a closing impact on your bottom line.” “DFS as a regulator is very, very concerned with the financial soundness of banks, insurance companies, because there's all these people out there that rely on financial services for their banking for their insurance policies.” “The more that you follow the regulation, the more that you have security and everything else, the less likely it will be that you will suffer one, or if you do, there'll be mitigation measures that won't have as serious an impact.” “Cyber insurance is such a critical issue for all companies. And I think that it goes hand in hand with cybersecurity protection.” “The stronger your cybersecurity protections, the better able you are to get a good cyber insurance policy.” “The last thing that I want to see as a former insurance regulator is for insurance companies to not be in the space or for the pricing to be such that people can buy cyber insurance." Time-Stamps: [00:57] - Maria's experience working with both private and public sectors and how both of them helped her build a strong career in law.

Lana Schwartzman (@LanaCryptoAML) is the Chief Compliance Officer at Dapper Labs, the team behind NBA Top Shots, NFL All Day, and Cryptokitties. Lana has more than 17 years of experience specializing in compliance, cryptocurrency regulations, and AML. Specifically, in BSA/AML/OFAC program development, MSB/MTL licensure process, internal audits, independent compliance program reviews, and consent order validation for various cryptocurrency exchange companies, financial institutions, and foreign banking organizations. Prior to joining Dapper Labs, she spent close to 3 years as a Chief Compliance Officer at a regulated P2P marketplace, and previously spent 7 years at Grant Thornton LLP in the Regulatory Risk Group specializing in BSA/AML and OFAC regulations. Lana spent her early years at Morgan Stanley and Deutsche Bank in various compliance roles. Lana is known as a subject matter expert in Regulations and Compliance related to cryptocurrency and she stays current on all AML regulations. Lana is a Certified Anti-Money Laundering Specialist (CAMS) and obtained the ACAMS Virtual Currency Certification and various Chainalysis certifications. She achieved the recognition of "AML Professional of the Month" in 2019 and has been a frequent panelist at various ACAMS, ACFCS, and Bitcoin conferences. You can also find Lana on LinkedIn. In this episode of Law of Code, Lana explains what a chief compliance officer does, building a compliance program, and why a compliance officer isn't the "fun police." We also discuss: - Mining Bitcoin - Dapper Labs - Where compliance officers add value - Learning more about compliance regulation - Surprising aspects of a compliance role - Changing sentiment of regulators - Promoting inclusion and diversity If you enjoyed this episode, please consider leaving a review. You can subscribe to our newsletter to stay updated on the latest episodes.

The topics discussed include the historic changes made by the AML Act at the beginning of 2021, including the Corporate Transparency Act (CTA); the proposed FinCEN rules to implement the CTA's beneficial ownership reporting requirements; the CTA's implications for financial institutions' customer due diligence compliance obligations; FinCEN's list of priorities for AML and countering the financing of terrorism; potential AML regulation of the real estate industry; and expectations for future BSA/AML regulation and enforcement concerning virtual currency and digital assets. Alan Kaplinsky, Ballard Spahr Senior Counsel, hosts a conversation with Peter Hardy, a partner in the firm.  A former federal prosecutor, Peter is a co-leader of the firm's Anti-Money Laundering Team.

Webcast URL: https://knowledgewebcasts.com/know-portfolio/bsa-aml-enforcement-and-compliance-cle/ Staying compliant with the evolving regulatory landscape of Anti-Money Laundering (AML) and the Bank Secrecy Act (BSA) has always been challenging. With the passage of the National Defense Authorization Act (NDAA) for the fiscal year 2021, increased scrutiny and heightened penalties are expected. Amidst these changes, financial institutions also grapple with imminent credit and liquidity risks which, if not mitigated, could significantly affect operations and revenue. Now, more than ever, financial service providers need to strengthen their BSA/AML compliance approaches and improve their transaction monitoring systems. To be able to seamlessly navigate these complexities, integrating an AML technology solution designed to increase efficiency, compliance, and profitability becomes imperative. Join financial services regulation practitioners Simon Moss (Symphony Ayasdia) and Evan T. Abrams (Steptoe & Johnson LLP) as they provide a comprehensive discussion on how financial institutions can leverage the use of technology to meet their BSA/AML obligations. Speakers will also share practical risk-based approaches to thwart perils and maximize the opportunities in this fast-paced regulatory climate. For any more information please click on the webcast URL at the top of this description.

Megan Prendergast Millard has an outstanding record in the world of AML and financial crime compliance. During her almost 15 years at the New York State Department of Financial Services, she supervised investigations of licensed institutions in a wide range of areas including BSA/AML, OFAC sanctions, market manipulation, virtual currency as well as all other banking and insurance matters. She was the recipient of the Superintendent's Award in 2012, 2016 and 2017 for her work on investigations including the Standard Chartered Bank, Société Générale and BNP Paribas for U.S. sanctions and anti-money laundering violations.  As Senior Managing Director at Guidepost Solutions, she is dedicated to helping design and develop effective BSA/AML and financial crime compliance programs that also deliver a best-in-class customer experience. Topics discussed in this episode: Megan's background in the world of financial crime and her experience working for the New York State Department of Financial Services Types of financial crime in small and large enterprises. How terrorist financing has changed over the years What criminals look for when targeting banks and financial institutions. The role of regtech and regulators to close the gap on the biggest weaknesses the financial system has. Cryptocurrencies vs Fiat currencies: opportunities and regulation needs How firms have evolved after enforcement actions and financial penalties The challenges of holding senior management accountable The contribution of whistleblower programs in the fight against financial crime 3 Pieces of practical advice to those actively engaged in AML.

This podcast Dean will address key provisions under NDAA that will impact BSA/AML, so everyone is prepared.   Brought to you by GeoDataVision and M&M Consulting

This week, host and AABD President David Baris is joined again by Ross Marrazzo, Managing Partner and Head of Compliance and Ethics of Treliant LLC, a leading bank consulting firm.In Part 2 to our BSA/AML discussion, Ross will address metrics prepared by the BSA Officer for your board to review, the importance of accurate data across the organization, the role of the board in evaluating staffing and qualifications of management, the advantages of having at least one board member with relevant background, and measures that the board can take to mitigate the risk of enforcement actions.Ross has over 34 years of domestic and international experience in the design, oversight, and assessment of AML/BSA, global economic sanctions, fraud, and anti-bribery/corruption programs.*****Thanks to our guest, Ross Marrazzo: https://www.treliant.com/our-team/ross-marrazzo/ Calling All Bank Directors is the podcast of the American Association of Bank Directors. AABD has been your advocate since 1989 and our podcast, hosted by AABD President David Baris, is designed to keep you well informed to help protect both you and your bank.Questions? Contact dbaris@aabd.org.

This week, host and AABD President David Baris is joined by Ross Marrazzo, Managing Partner and Head of Compliance and Ethics of Treliant LLC, a leading bank consulting firm.In Part 1 to our BSA/AML discussion with Ross, he will address bank board responsibilities and regulatory expectations, program sustainability and resilience, how bank boards succeed or fail, and the metrics that boards should look for from their BSA Officer.Ross has over 34 years of domestic and international experience in the design, oversight, and assessment of AML/BSA, global economic sanctions, fraud, and anti-bribery/corruption programs.*****Thanks to our guest, Ross Marrazzo: https://www.treliant.com/our-team/ross-marrazzo/ Calling All Bank Directors is the podcast of the American Association of Bank Directors. AABD has been your advocate since 1989 and our podcast, hosted by AABD President David Baris, is designed to keep you well informed to help protect both you and your bank.Questions? Contact dbaris@aabd.org.

This week, Vice Chairman John Byrne, and Creative Director Elliot Berman of the AML RightSource staff discuss the latest actions in Congress to pass sweeping reform to the AML infrastructure.

Topics include how banking regulators and FinCEN will approach the decision whether to bring an enforcement action (including what BSA/AML program failures typically would (or would not) result in cease and desist orders), how the regulators’ statement differs from 2007 guidance, how the statements relate to recent updates to the BSA/AML examination manual, suggested practices for reducing compliance risk for institutions and individuals, and the Presidential election’s potential impact on enforcement.

Jim is the Principal and Founder of RegTech Consulting, a private consultancy aimed at developing the next generation of BSA/AML and financial crime professionals, technologies and programs. Previously Jim worked for over 10 years as the BSA Officer, Global Head of Financial Crimes Risk Management at Wells Fargo & Co, and before that he served as the Global Anti-Money Laundering Operations Executive for Bank of America. Jim was also a founding member of the ACAMS advisory board, has spent five years serving as Assistant District Attorney, Special Investigations Unit in Cambridge, MA, and is the author of “Transnational Criminal Organizations, Cybercrime, and Money Laundering” (CRC Press, 1998). See acast.com/privacy for privacy and opt-out information. Hosted on Acast. See acast.com/privacy for more information.

Jim is the Principal and Founder of RegTech Consulting, a private consultancy aimed at developing the next generation of BSA/AML and financial crime professionals, technologies and programs. Previously Jim worked for over 10 years as the BSA Officer, Global Head of Financial Crimes Risk Management at Wells Fargo & Co, and before that he served as the Global Anti-Money Laundering Operations Executive for Bank of America. Jim was also a founding member of the ACAMS advisory board, has spent five years serving as Assistant District Attorney, Special Investigations Unit in Cambridge, MA, and is the author of “Transnational Criminal Organizations, Cybercrime, and Money Laundering” (CRC Press, 1998). Hosted on Acast. See acast.com/privacy for more information.

Jim is the Principal and Founder of RegTech Consulting, a private consultancy aimed at developing the next generation of BSA/AML and financial crime professionals, technologies and programs. Previously Jim worked for over 10 years as the BSA Officer, Global Head of Financial Crimes Risk Management at Wells Fargo & Co, and before that he served as the Global Anti-Money Laundering Operations Executive for Bank of America. Jim was also a founding member of the ACAMS advisory board, has spent five years serving as Assistant District Attorney, Special Investigations Unit in Cambridge, MA, and is the author of “Transnational Criminal Organizations, Cybercrime, and Money Laundering” (CRC Press, 1998). See acast.com/privacy for privacy and opt-out information.

In part 3 of this series Chance shares how he and his team are in the trenches with banks daily with Review Alliance helping them achieve compliance in areas of BSA/AML, CRA, lending, and more! He also speaks of the importance of being present at banking industry conferences and events to demonstrate the trust and confidence required to build the sound relationships the company has in the banking industry.Learn more about Review Alliance at www.reviewalliance.com!Podcast is powered by The Binge Podcast Network! Intro/Outro - "Minding Your Business" by Eli POverlay - "Summer in NY" by Ayalia The MYB community resides at www.themybpodcast.com!!!

Tune as IIB's General Counsel Stephanie Webster interviews Satish Kini, Chair of Debevoise's Banking Group and Dave Sewell, Counsel in Debevoise's New York Office, both members of the firm's Financial Institutions Group, as they cover recent BSA, AML, and OFAC developments and developing trends and discuss how the pandemic response has and hasn't affected the financial crimes compliance landscape.

In light of the coronavirus and COVID-19 pandemic, Abrigo brought together some of our industry experts to discuss the pressures and challenges facing BSA and fraud professionals during these unprecedented times. This discussion touches on topics like contingency plans, fraud trends, maintaining compliance, and staying secure while working remotely.

In our examination of two recent OCC BSA/AML consent orders, one with a bank and another with an individual in-house professional, we review the OCC’s allegations underlying the orders and how the OCC focuses on the core pillars of BSA/AML compliance when choosing to pursue enforcement. We also discuss the takeaways for boards and management of financial institutions when accepting higher-risk customers, including digital currency exchanges, and what is the AML liability risk for individuals – including how such risk can be minimized, and the inherent tension between the interests of institutions and their executives and compliance officers. Finally, we discuss how the use of third-party consultants and advisors regarding AML compliance can be a double-edged sword for financial institutions and individuals facing downstream enforcement actions.

Today we dive into the complex world of Cannabis banking with my guest, Kyle Taylor--an attorney who specializes in the Bank Secrecy Act and Anti-Money Laundering BSA/AML).We discuss the challenges that banks face when working with Cannabis businesses in regards to compliance and regulatory matters. Kyle's expertise in BSA/AML provides a unique perspective on the future of Canna-banking, and what changes we can expect to see as the industry continues to move in the direction of Federal legalization. If you are a Canna-business owner, or have aspirations of becoming one, you DO NOT want to miss this episode!

Bernie Mason, RMA's Regulatory Affairs Liaison, discusses the federal banking agencies' and FinCEN's statement to encourage insured institutions to consider, evaluate, and implement innovative approaches to meet their BSA/AML compliance obligations in order to strengthen the financial system against illicit financial activity.

In today's episodes, we are going to explore some of the complexities of a Security vs. Utility token which are fresh on our minds after the recent SEC announcement about Ether and Bitcoin not being considered securities. William Hinman, the SEC's Director of Corporate Finance made the announcement: “Strictly speaking the token, the coin, whatever the digital information packet is being called all by itself, we don’t think is a security. Just as oranges in the Howey case were not securities. Essential to determining whether a security is being offered, however, is how it’s being sold and a reasonable expectation of purchasers. When someone buys a housing unit to live in it’s probably not a security but under certain circumstances, the same asset could be offered and sold in a way that could cause investors to have a reasonable expectation of profits based on the efforts of others. If the housing unit is offered with a management contract or other services where purchases are encouraged to invest rather than reside, it could be a security. Case law tells us that,” Hinman explained during his speech. Securities are the talk of the regulator town and perhaps less so in the Cryptosphere's now that we have a solidified answer. However, many other projects have uncertain futures as to their designation which may bring pause to would be Blockchain empire builders. The Street, a finance-focused media outlet, defines securities as follows: "A simple definition of a security is any proof of ownership or debt that has been assigned a value and may be sold. (Today, evidence of ownership is likely to be a computer file, while once it was a written piece of paper.) For the holder, a security represents an investment as an owner, creditor or rights to ownership on which the person hopes to gain profit. Examples are stocks, bonds and options. The Securities and Exchange Act of 1934 provides this more complicated definition, but you might want to grab a cup of coffee: "The term 'security' means any note, stock, treasury stock, bond, debenture, certificate of interest or participation in any profit-sharing agreement or in any oil, gas, or other mineral royalty or lease, any collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit, for a security, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities..." To help us demystify this fascinating (yet complex) situation of Securities vs. Utility tokens we brought in Joe Ciccolo, an expert in building BSA/AML programs as well as over 10 years of banking compliance. Joe founded BitAML, a regulatory compliance advisory group, to help Blockchain startups and innovators to remain above board in a rapidly shifting (and uncertain) regulatory landscape. For show notes and more visit: LAB Radio

We’re moving into a new era of regulation and compliance that will be driven by new technology. Most of our listeners know I’ve co-founded a regtech firm, Hummingbird, to help bring this new model, first, to anti-money laundering, which is widely seen as the arena where the old compliance model is most broken, and where new technology could go the farthest, fastest, to solve everyone’s problems -- by both improving outcomes and cutting costs. There is a growing global “regtech” community, in both the public and private sectors, aiming to transform financial regulation and compliance, and specifically to make them both digitally-native, with all the power of digitization to make everything better, faster, and cheaper, all at once. Executing this transformation will take imagination, vision, wisdom and even courage, which is why I invited today’s guest to join us.  He is Jim Richards, founder of the new firm, RegTech Consulting, and I think he used the word “courage” six times, in our talk.  We sat down together at this year’s LendIt conference in San Francisco, just a few days after Jim had retired from his position as the Bank Secrecy Act Officer and Global Head of Financial Crimes Risk management at Wells Fargo, a job he held for more than twelve years. He’s also an attorney and a deep expert in financial crime. Jim is famously outspoken. He’s also funny (he says the book he wrote on transnational financial crime sold more copies in Russian than in English. Most of all, though, he’s frustrated. He thinks we can do better in fighting financial crime. I do too. According to the United Nations, there’s about $2 trillion in global financial crime each year, and we’re catching less than 1 percent of it. To achieve these paltry results, the financial industry spends around $50 billion a year. In other words, launderers can fund terrorism and amass wealth by trafficking in drugs, weapons, and human beings, with very little risk of getting caught. No wonder financial crime is a growing global business. Jim says that the heart of this problem is that incentives are misaligned, which means resources are too. He thinks we’ve built a regulatory system that does not reward effectiveness but instead prizes compliance “hygiene.” The theory of the system, of course, is that banks’ careful compliance with the AML regulations should lead to high levels of effectiveness in helping law enforcement stop financial crime. Possibly, in an earlier era, it did. Today, though, there is a massive mismatch between the compliance activities required by our regulations and the desired outcomes -- partly because the technology of both money laundering, and anti-money laundering, has shifted under our feet. And today’s methods can’t scale up. Like many people in the AML world -- including me -- Jim envisions a better system in which, mostly through newer technology, we could take some of the thousands of people and billions of dollars devoted to this effort and redirect them to drive better results, and cut the costs, too. He has lots of ideas. They include updating the rules on Currency Transaction Reports; fixing the Know Your Customer process through more information standardization, prescreening, and data sharing; addressing the new beneficial ownership requirements (which he calls a tsunami hitting banks and their small business customers; and resolving what he calls “The Clash of the Titles” -- the four titles of the US Code that govern financial crime. He suggests getting law enforcement input into financial regulators’ enforcement efforts. He has thoughts on how AML and fraud detection overlap and differ. He says there’s a lot to learn from how fintech companies do AML since they generally have good data and new systems. Like our previous Barefoot Innovation guest, Ripple’s Chris Larsen, Jim sees a useful model in how global trade was transformed by the advent of standardized shipping containers, as explained in Marc Levinson’s book, The Box. A key issue is transaction monitoring (although Jim vigorously argues that term is obsolete). The law requires banks to monitor their customers’ activity and report suspicious patterns.  Today, this process, systemwide, produces huge over-reporting of meaningless alerts that drown both bank personnel and law enforcement in low-value information they don’t have the tools to analyze. It’s a perfect use case for AI, which Jim says Wells Fargo began using in AML as early as 2008 and is now building further under his successor, Graham Bailey (whom Jim calls a genius, the best AML technologist in the industry). Jim says that banks like Wells Fargo devote less than ten percent of their AML compliance people to working on sophisticated, complex crime, while the other 90+ percent do regulatory compliance, just “crunching through the volumes.”  This is at a time when the crime itself is getting more and more sophisticated because the worst criminals are adopting new tech and are building global networks, most of which we can’t find with current methods. He makes the case that it would be good to flip that and deck the 90 percent against the big problems. We already have the technology to do that, both in process and analytics. We just need to enable the system to adopt it, for both government and industry. The original AML law in the United States, the Bank Secrecy Act, is approaching the half-century mark. It’s been modernized and automated along the way -- FinCEN has brought in a lot of automation -- but the system doesn’t yet leverage the newest technology. It needs to shift to digitally-native design, probably with open source technology that can enable new, efficient, effective approaches, system-wide. A few weeks after we recorded this episode, I hosted a roundtable in Washington where experts from across the AML ecosystem -- large and small banks, fintechs, regtechs, bank regulators, trade groups, Congressional staff, academics and, crucially, law enforcement -- spent a day together thinking through next-generation AML. The new Comptroller of the Currency, Joseph Otting, has made AML modernization a top priority. Change is coming. And it’s attracting great people, including great tech people, into solving these problems, including many who, a year ago, would surely have laughed to hear Jim Richards say, as he did to me, that BSA Officer is “the most fascinating job you can have in banking.”  People think compliance is boring. They’re wrong. It’s fascinating, and it’s important. Jim has founded his new firm, RegTech Advisors, to, as he puts it, “develop the next generation of professionals, technologies, programs, and regimes and really make a difference.” He thinks doing that will take courage... including the courage to make some mistakes. That’s a type of courage that doesn’t come easily to the regulatory sector, but we’re going to have to develop it. More on Jim Richards James R. Richards, B.Comm., JD, CAMS Principal and Founder, RegTech Consulting, LLC www.regtechconsulting.net Richards@ThinkRTC.net (925) 818-6612 Author, “Transnational Criminal Organizations, Cybercrime, and Money Laundering” (CRC Press, New York, London, Boca Raton, ISBN 0-8493-2806-3) Jim Richards is Principal and Founder of RegTech Consulting, LLC, a private consultancy aimed at developing the next generation of BSA/AML and financial crimes professionals, technologies, and programs. Services include BSA Officer coaching, program reviews, crisis management, director support, non-financial institution development and awareness, and FinTech due diligence. From 2005 to April 2018 Jim was BSA Officer, Global Head of Financial Crimes Risk Management, Wells Fargo & Co., where he was responsible for governance and program oversight of Bank Secrecy Act and AML for Wells Fargo’s global operations, including quarterly reporting to the Board of Directors. As Director of the Global Financial Crimes Risk Management group, Jim oversaw governance and program execution of BSA, AML, External Fraud, Global Sanctions, Financial Crimes Analytics, and High-Risk Customer Due Diligence. He was a member of the Wells Fargo Management Committee and Enterprise Risk Management Committee, and he represented Wells Fargo with the Bank Secrecy Act Advisory Group (BSAAG) of the US Department of the Treasury. Jim previously held AML and financial intelligence positions at Bank of America and FleetBoston. He was also an Assistant District Attorney, Special Investigations Unit, Middlesex County District Attorney’s Office, in Cambridge, MA, investigating and prosecuting cases involving narcotics, organized crime, white-collar crime, and economic crime in the largest county in Massachusetts.  Investigations and prosecutions included felony embezzlement, attorney fraud, public corruption, computer-based larceny, gambling, money laundering, and organized gambling cases. He was Supervisor of the SIU’s Narcotics Forfeiture Group, with carriage of and supervision over the Group’s civil and criminal forfeiture caseload. Jim has prior experience in private legal practice at Choate, Hall & Stewart in Boston, as a Barrister in Ontario, Canada, and as Special Constable, Royal Canadian Mounted Police, E Division (British Columbia). More for our listeners Article I co-authored with Hummingbird Cofounder Matt Van Buskirk on how to fight human trafficking My podcast on the India Stack with Sanjay Jain The Box, by Marc Levinson Thank You For Being Late, by Thomas Friedman We have great shows in the queue. We’ll talk with the CEO’s of two community banks -- Bob Rivers of Eastern Bank and Mike Butler of Radius Bank, both of which are leading the way in innovation by smaller institutions. We’ll also have two more I recorded at LendIt. One is a discussion of new research undertaken jointly by LendUp and Experian, on how to improve financial access through credit reporting. The other is with my friend Greg Kidd of Global ID.  I’m pleased to say we also will have several members of Congress in the coming weeks, and also several guests I’ll record at the upcoming, global AML tech sprint being run by the UK Financial Conduct Authority. I hope to see you at upcoming events including: Comply 2018, May 16, New York, NY FCA TechSprint, May 22-25, London, UK (By invitation only) American Bankers Association Payments Forum, June 1, Washington, DC CFSI’s Emerge, June 6, Los Angeles, CA North Dakota Bankers Convention, June 11-12, Fargo. ND American Bankers Association Regulatory Compliance Conference, June 26, Nashville, TN Money 2020, October in Las Vegas where, among other things, I’ll be speaking on the Revolution Stage about the revolution in...what else?  Regulation. As always, please remember to review Barefoot Innovation on iTunes, and sign up to get emails that bring you the newest podcast, newsletter, and blog posts, at jsbarefoot.com. Again, follow me on twitter and facebook.   Support the Podcast And please send in your “buck a show” to keep Barefoot Innovation going! Subscribe Sign up with your email address to receive news and updates. Email Address Sign Up We respect your privacy. Thank you!

Joe Ciccolo is an accomplished expert in building and implementing successful BSA/AML programs for traditional and non-traditional financial institutions offering a variety of banking products and services.  Following 10+ years in legacy bank compliance, Joe founded BitAML, a regulatory compliance advisory group devoted exclusively to helping bitcoin startups and innovators leveraging Blockchain technology. BitAML allows him to share his subject matter expertise with those that share his passion for digital currency and all the potential it holds for the future. Joe is a frequent guest speaker at both Bitcoin and Blockchain conferences. He also meets regularly with traditional bankers and volunteers his time and talents with the non-profit Blockchain Education Network. After listening to this episode you will learn: Joe's background and how he got into the field What compliance, AML and KYC is and why we need it How the market has shifted over the last two years What Joe does with bitAML How he decided to tackle that niche Specific problems he solves for organizations and how A first-time sneak peek on a new SaaS software solution from BitAML How Joe thought of it and what's your roadmap for future development What excites and scares Joe about the direction of compliance and regulation For show notes and more please visit: LAB Radio by CoinStructive

Cryptopreneurs Radio with Host Linda Ballesteros and Tony Gambone with Special Guest Joseph Ciccolo: Joe Ciccolois an accomplished compliance expert and has spent the last several years building, developing and implementing successful AML compliance programs for both financial and non-financial institutions. He is a Certified Anti-Money Laundering Specialist, Certified Fraud Examiner, and Anti-Money Laundering Certified Associate. His company, BitAML, provides regulatory compliance consulting to bitcoin companies, including bitcoin ATM operators, exchanges, brokers, and peer-to-peer lending platforms. As a bitcoin compliance guru, Joe is a frequent guest speaker at digital currency, blockchain, and risk management industry conferences and events. Prior to launching BitAML, Joe was a founding member and architect of the BSA/AML program of a top 100 U.S.-based financial institution. He also served as a project manager for a top 20 global bank, where he led several regulatory and audit remediation projects. Before entering the field of BSA/AML, Joe held leadership positions within various risk management disciplines, including vendor due diligence, fraud prevention, and corporate investigations.