Consumer Watchdog Slams New Bank Rules

FOR IMMEDIATE RELEASE

Contact: Kara Zupkus (224) 456-0257

WASHINGTON, D.C. – Today, the Taxpayers Protection Alliance sharply criticized the White House for ordering costly new rules on financial institutions. Released on May 19, the Executive Order directs the Secretary of the Treasury to “propose changes to applicable implementing regulations of the Bank Secrecy Act to strengthen risk-based customer due diligence requirements for covered financial institutions.” While the changes are designed to ensure that financial institutions can “reasonably identify the nominal and beneficial owners of accounts in order to assess risks related to illicit finance, sanctions evasion, fraud, or other unlawful activity,” the White House declined to comment on the feasibility of this approach or the costs imposed on law-abiding account holders.

Ross Marchand, Executive Director of the Taxpayers Protection Alliance, offered the following comment:

“This effort to ‘restore integrity’ to the financial system will impose yet another layer of red tape on banks and the millions of Americans who rely on them. Banks already face an alphabet soup of compliance mandates under the Bank Secrecy Act, anti-money laundering rules, ‘know your customer’ requirements, suspicious activity reporting obligations, and countless federal examinations. Instead of simplifying this costly system, the White House wants financial institutions to devote even more resources toward enforcement. This will not end well for taxpayers or consumers.

“This EO will not make Americans safer. In fact, it will reduce Americans’ financial security through higher fees, reduced access to credit, slower account approvals, and fewer financial services options. Pushing more Americans outside the regulated banking system also risks bolstering illicit financial networks, benefiting criminals at everyone else’s expense.

“President Trump has been right to focus on excessive regulation choking financial innovation and increasing costs. This EO is an unfortunate about-face that will do little besides create more paperwork, more compliance headaches, and more costs for everyday Americans.”

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The Taxpayers Protection Alliance (TPA) is a non-profit, non-partisan organization dedicated to educating the public through the research, analysis, and dissemination of information on the government’s impact on the economy.