Tougher Penalties for Laundering Endorsed by ABA

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Tougher Penalties For Laundering Endorsed by ABA

The American Bankers Association on Thursday endorsed legislation raising penalties for banks that willfully violate federal money-laundering laws.

Speaking on behalf of the ABA at the Senate Banking Committee's latest round of hearings on money laundering, Robert H. Hodges Jr, executive vice president of the South Carolina Bankers Association, said the ABA supports legislation that would remove the current $10,000 ceiling on penalties for willful violations of bank reporting requirements.

Under laws designed to detect the movement of large amounts of cash, banks are currently required to report transactions of $10,000 or more. Each violation of that requirement can lead to imposition of a $10,000 civil penalty. Financial institutions are also subject to criminal penalties ranging up to $500,000.

A bill introduced by Sen. Alfonse M. D'Amato, R-N.Y., who is a committee member, would raise the civil penalty to the amount of the transaction.

Mr. Hodges told the panel, "This provision introduces the concept of forfeiture as a penalty. The ABA has supported, and continues to support, increased penalties for willful violations of the Bank Secrecy Act. …