The Treasury Department issued a strategy on de-risking, which occurs when financial institutions terminate or restrict business relationships indiscriminately with broad categories of customers rather than analyzing and managing the risk of those customers.
Details: Required by the Anti-Money Laundering Act of 2020, the 2023 De-risking Strategy says:
De-risking drives financial activity out of the regulated financial system, hampering remittances and preventing access to the financial system.
The cost of implementing anti-money laundering compliance measures is a key factor in financial institutions’ de-risking decisions.
The federal government should consider clarifying and revising Bank Secrecy Act regulations and guidance.