While the U.S. approach to combating money laundering in the banking sector has shifted along with the overall regulatory landscape, Fitch Ratings says it’s not seeing anti-money laundering (AML) authorities back away from enforcement.
In a report published Tuesday, the rating agency examined the evolving approach to combating money laundering in the U.S. banking sector, finding that while the authorities’ underlying strategic priorities have changed, enforcement expectations remain strong.
“The shifts in regulation reflect more style than substance,” Fitch said.
For instance, the current administration is focused more on targeting money laundering by transnational criminal organizations and drug cartels, whereas the previous regime prioritized corporate transparency and the reporting of beneficial ownership information, the report noted.
“U.S. AML priorities continue to revolve around national security, but the emphasis has shifted to specific targets and enacting efficiencies versus program transparency,” said Maria-Gabriella Khoury, senior director at Fitch Ratings, in a release.
And, while there’s been a greater emphasis on improving regulatory efficiency under the new regime, “enforcement messaging suggests continued willingness to pursue cases involving weak controls or willful blindness,” the report said.
“The net effect is a modest shift in supervisory emphasis and tools, rather than a relaxation of core AML expectations,” Khoury added. “Enforcement priorities remain robust, particularly for national security threats, cross-border activity and individual accountability.”
As a result, Fitch said the overall impact of any regulatory changes in this area will be credit neutral.
“The practical implications focus less on reducing the need for AML investment and more on recalibrating risk coverage and reporting,” it said.