A Case for Reforming the Anti-Money Laundering Regulatory Regime: How Financial Institutions’ Criminal Reporting Duties Have Created an Unfunded Private Police Force

Authors

Christopher Wilkes, Indiana University Maurer School of LawFollow

Document Type

Note

Publication Date

4-15-2020

Publication Citation

95 Indiana Law Journal 649 (2020)

Abstract

Part I of this Note provides background information outlining the relevant BSA/AML laws that establish financial institutions’ affirmative duties to report financial crimes. Part II analyzes the contours of other laws that create mandatory criminal reporting obligations, including their extent, their underlying justifications, and how stringently government agencies enforce them. Part III demonstrates how financial institutions’ reporting duties are uniquely stringent and punitive compared to those imposed elsewhere in the law, and it questions the justifications of this policy. Lastly, Part IV of this Note argues that the BSA/AML regulatory regime could be reformed to reduce the costs and duties borne by financial institutions without sacrificing the government’s interests in deterring money laundering and ensuring national security. To be clear, this Note does not advocate for the elimination of BSA/AML reporting duties. Rather, it argues that the current BSA/AML regulatory regime would be more consistent with its stated objectives if federal policymakers adopted measures that reduce the disproportionate costs and perverse incentives discussed in this Note.

Recommended Citation

Wilkes, Christopher (2020) "A Case for Reforming the Anti-Money Laundering Regulatory Regime: How Financial Institutions’ Criminal Reporting Duties Have Created an Unfunded Private Police Force," Indiana Law Journal: Vol. 95: Iss. 2, Article 7.
Available at: https://www.repository.law.indiana.edu/ilj/vol95/iss2/7