Regulators: Financial Crime Enforcement Will Remain Priority Under Trump

Banking regulators say a change in presidential administrations won’t change their approach to financial crime.

While Donald Trump may be focused on deregulation, banking industry experts at a conference in New York this week say financial crime will remain a bipartisan focus, Reuters reported Wednesday (Nov. 13).

Preventing criminals from using banks for financial crimes “has been a priority area and you are going to see enforcement actions” that highlight compliance with the Bank Secrecy Act (BSA), said Whitney Case, associate director of the enforcement and compliance division at the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

“In the BSA/AML universe, we have a broad remit so we are going to continue to see a variety of actions against a variety of financial institutions,” she said, referring to anti-money laundering (AML) measures.

As Reuters notes, officials have stepped up oversight of banks’ operations and risk management practices, while taking disciplinary action against financial institutions for failing to impose proper measures to detect and prevent money laundering. For example, federal authorities last month fined TD Bank a record $3 billion for its AML issues.

In that case, “there were significant gaps in the monitoring that left all of us, supervisory and enforcement colleagues, in a situation where we have to take action,” Case said.

This new focus on making sure financial institutions (FIs) crack down on crime comes as a significant number of Americans are dealing with financial scams.

Research by PYMNTS Intelligence and Featurespace finds that nearly a third of U.S. consumers or households — around 77 million people — have fallen victim to a financial scam in the last five years.

In many cases, the financial implications of these scams are severe, with most victims losing more than $500 and many suffering thousands of dollars in losses.

“Banks and other FIs serve as the frontline defenders and advocates for victims of financial scams,” PYMNTS wrote last month. “We find that consumers are much more likely to recover funds if they have reported the losses to their FI. That said, more than half of scam victims consider switching FIs after their traumatic experience, and 30% actually do so.”

In related news, FinCEN this week issued a warning to FIs this week about the danger of scams that use deepfake media created with generative artificial intelligence (GenAI).

“While GenAI holds tremendous potential as a new technology, bad actors are seeking to exploit it to defraud American businesses and consumers, to include financial institutions and their customers,” said FinCEN Director Andrea Gacki. “Vigilance by financial institutions to the use of deepfakes, and reporting of related suspicious activity, will help safeguard the U.S. financial system and protect innocent Americans from the abuse of these tools.”