Link to New State Laws Create Tension with Federal AML Requirements New State Laws Create Tension with Federal AML Requirements
An increasing number of states have either enacted or are considering enacting legislation requiring financial institutions to provide persons (both existing customers and prospective customers) who are not ordinarily protected by the federal anti-discrimination statutes with “fair access” to financial services.
For example, and as we have blogged, a new Florida law (Fla. Stat. § 655.0323, entitled “Unsafe and unsound practices”) prohibits federal and state depository institutions conducting business in the state from denying services based on religion or political beliefs and activities. As we also have blogged, this Florida law prohibits a financial institution acting on the basis of “any factor if it is not a quantitative, impartial, and risk-based standard, including any such factor related to the person’s business sector[.]” This prohibition creates a clear challenge for implementing an anti-money laundering/countering the financing of terrorism (“AML/CFT”) compliance program, which inherently involves subjective judgments and an assessment of the risk presented by a customer based on its line of business.
This podcast provides an in-depth exploration of these state laws and the challenges they present. Alan Kaplinsky, Senior Counsel and former chair for 25 years of the firm’s Consumer Financial Services Group, moderates this podcast. We are grateful to be joined by Brian Knight, Senior Research Fellow at the Mercatus Center of George Mason University, and Professor Peter Conti-Brown of the Wharton School of the University of Pennsylvania.
We hope you enjoy the podcast.
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