The February edition of FinScan’s Regulatory Roundup highlights a special analysis of revived fair access and anti-debanking laws in the US. Other coverage focuses on major shifts in financial compliance, including key takeaways from the largest AML penalties of 2024, the latest status of the Corporate Transparency Act (CTA), and new executive actions shaping digital finance.
SPECIAL ANLYSIS: U.S. FAIR ACCESS & ANTI-DEBANKING LAWS
What are fair access and anti-debanking laws?
During President Donald Trump’s first term in office, the U.S. Treasury Office of the Comptroller of the Currency (OCC) released its “fair access” final rule requiring “covered banks” (such as national banks and federal savings associations with at least $100 billion in assets) to provide financial services equally within their market, deny services only based on pre-established, risk-based criteria, and avoid coordinated service denials.
In short, the rule prohibits denying, canceling, suspending, or terminating services to current or prospective customers or otherwise discriminating against customers on the basis of:
The customer’s political opinions, speech, or affiliations
The customer’s religious beliefs, religious exercise, or religious affiliations
Any factor if it is not a quantitative, impartial, and risk-based standard, including any factor relating to the customer’s business sector
Any rating, scoring, analysis, tabulation, or action that considers a social credit score based on certain factors.
The rule was later paused under Biden administration. But in the meantime, Tennessee and Florida enacted their own fair access and anti-debanking laws with at least 10 other states introducing similar legislation.
Bipartisan concern
In July 2024, a bipartisan congressional group issued a letter to the OCC, Treasury, and FinCEN stating concern that fair access laws “may conflict with federal laws intended to combat money laundering and terrorist financing…[and] pose significant challenges to compliance with critical regulations such as the Bank Secrecy Act (BSA), and the Anti-Money Laundering (AML) Act, potentially threatening national security.”
On July 18, Treasury responded, noting it shared Congress’ concerns, including concerns that state laws similar to FL HB 989 “may materially undermine compliance with the important AML/CFT and sanctions requirements administered by [FinCEN] and Office of Foreign Assets Control (OFAC).”
What’s next?
Since Trump took office again in January 2025, the new FDIC chairman issued a statement outlining the matters the FDIC expects to focus on in “the coming weeks and months.” Among these matters, he included “work[ing] to ensure law-abiding customers have, and do not lose, access to bank accounts and banking services.” With a trifecta of Republican control in the U.S. government, we expect to see renewed efforts in Congress to enact fair access or debanking laws.
For compliance officers and MLROs, this will likely affect their organizations’ AML compliance processes, screening configurations including those for adverse media, and customer risk ratings.
ANTI-MONEY LAUNDERING
2024 AML penalties: lessons learned
What can we learn from the top five AML penalties of 2024?
TD Bank ($3.1B): Choosing profits over compliance can be costly.
Klarna ($46M): Buy-now-pay-later (BNPL) companies should be aware of how products and services can be used for money laundering.
SkyCity ($41M): Casinos, like all businesses, must take AML obligations seriously.
Starling Bank ($38M): Challenger banks continue to face scrutiny over AML compliance.
Nordea Bank ($35M): Unchecked banking relationships can import significant risks to regional financial systems.
What should organizations do to avoid AML penalties going forward?
At all times, maintain a qualified BSA Officer with sufficient knowledge and understanding of AML regulations and business, and clear communication lines with bank’s senior management and board of directors
Identify and file SARs efficiently by creating a framework to detect and report suspicious activity
Implement transaction monitoring thresholds and validate thresholds periodically including name and transaction screening
Implement a risk-based customer due diligence program
US provides CTA status update
As of January 23, 2025, the US Supreme Court ruled in favor of the federal Corporate Transparency Act (CTA) and lifted the injunction in the in Texas Top Cop Shop suit. However, FinCEN confirmed that a January 7, 2025, injunction in Smith v. U.S. Treasury keeps CTA enforcement suspended, so companies are not required to but may voluntarily comply with the information reporting requirements.
Trump issues executive order on digital financial technology
President Trump issued an executive order on Strengthening American Leadership in Digital Financial Technology to promote “open access to banking services” and prohibit central bank digital currencies (CBDCs). The order emphasized digital assets and blockchain technology’s role in economic innovation, advocating for citizens’ rights to use blockchain networks without persecution.
Block’s CashApp fined $79M for BSA violations
The Conference of State Bank Supervisors (CSBS) issued Block’s CashApp a $79 million penalty for violating the Bank Secrecy Act by failing to “perform due diligence on customers, from identity verification to reporting suspicious activity.” Block must now appoint a committee to assist with administration of agreement, ensure its Board of Directors have ultimate responsibility for overseeing Block compliance, and engage an independent consultant to review Block’s AML program.
SANCTIONS
Trump begins altering sanctions
Upon inauguration, Trump has rescinded many of the previous administration’s executive orders which has resulted in, among other things, Cuba returning to the list of state sponsors of terrorism. Further, authority now rests with Trump to designate international cartels as a national security threat which results in their addition to OFAC’s SDN list. Trump also rescinded an order from the previous administration that allowed sanctions against persons believed by the US to threaten the peace and security of the West Bank. Finally, Trump canceled a prior executive order and established a basis for issuing sanctions against the international criminal court, its officials, employees, agents and family members.
US BIS prohibits imports, sales of connected vehicles and systems with China or Russia nexus
The US Department of Commerce Bureau of Industry and Security (BIS) published its final rule addressing national security risks associated with connected vehicle technologies. The rule establishes comprehensive prohibitions targeting specific hardware and software integral to Vehicle Connectivity Systems (VCS) and Automated Driving Systems (ADS).
UK issues sanctions guidance for UK exporters
The UK has issued new guidance intended to support UK exporters in understanding Russian circumvention practices and in reducing the risk of their business being targeted by those seeking to evade sanctions.
UK provides supplemental financial sanctions guidance for high value dealers
The UK has provided supplementary financial sanctions guidance for entities and individuals that operate in the sale or trade of high value goods, especially those trading internationally with regions that may be subject to UK financial sanctions restrictions.
ARTIFICIAL INTELLIGENCE
Trump’s potential impact on the use of AI in compliance
Based on President Trump’s first presidency and campaign rhetoric, we can anticipate three general themes shaping his new administration’s approach to AI: deregulation, market-driven innovation, and national security focus.
Insights on US AI export controls
The last days of the Biden administration saw an imposition of new, complex export controls on AI technology. The Interim Final Rule on Framework for AI Diffusion tightens existing controls on advanced computing integrated circuits (IC), computing equipment, and related technology; introduces new export controls on closed AI model weights; requires export licensing for most countries; and establishes a tiered security framework for securing authorization to receive the most advanced US AI technology.
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