In an article for Law360, litigation partner Erica MacDonald, corporate counsel Joseph Green, and litigation associate Andy Taylor discuss how recent federal actions are expanding regulatory requirements for banks and money transmitters, particularly in anti-money laundering enforcement, leading to increased compliance burdens, targeted data collection, and new reporting obligations for financial institutions.
The authors note that federal financial regulators have long relied on banks and money transmitters as front-line partners in anti-money laundering and counter-terrorist financing enforcement, but recent developments, such as a May 19 executive order directing regulators to strengthen customer identification and due diligence requirements related to immigration status and employment authorization, confirm a more expansive and operationally disruptive use of the financial system. This shift involves targeted, policy-driven data collection imposed through executive orders, temporary agency orders, and regulatory guidance.
The authors highlight that this trend is already apparent in Minnesota with the Financial Crimes Enforcement Network recently issuing a geographic targeting order requiring certain banks and money transmitters to report certain outbound international fund transfers of $3,000 or more.
