By Dylan Tokar, Wall Street Journal
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Bessent wants department to be ‘a gatekeeper’ on rules that force banks to monitor for illicit transactions and money laundering
The Trump administration is preparing a shake-up of anti-money-laundering rules, in an effort to overhaul a system for catching illicit transactions by drug traffickers, terrorists and other criminals that banks complain is costly and ineffective.
In a draft term sheet circulated to the nation’s banking regulators, the Treasury Department has proposed taking a more central role in the enforcement of anti-money-laundering rules.
The current system provides law-enforcement officials with some insight into the murky world of illicit finance, but it isn’t necessarily effective at stopping money laundering before it happens. The Wall Street Journal earlier this year reported how one money-laundering group in Los Angeles County was able to launder more than $50 million for the Sinaloa cartel, including by making six-figure deposits at JPMorgan Chase and Bank of America branches.
Banks have pressed for changes like the ones in the proposal and criticized regulators for being too focused on technical compliance and not the spirit of the money-laundering laws. The industry broadly has been cheering the administration’s efforts to cut regulations on everything from how much capital they hold to how much they can lend, while also reining in federal watchdogs. The Trump administration, and Treasury Secretary Scott Bessent, think the restrictions on banks have inhibited economic growth.