Compliance: GAO conducts review of ‘de-risking’

The Anti-Money Laundering Act of 2020 requires the Government Accountability Office (GAO) to conduct a review of “de-risking” practices in financial services. The U.S. State Department defines de-risking as the phenomenon of financial institutions terminating or restricting business relationships with clients or categories of clients to avoid, rather than manage, risk.

The legislation states that, “the financial exclusion caused by de-risking can ultimately drive money into less transparent, shadow channels through the carrying of cash or use of unlicensed or unregistered money service remitters, thus reducing transparency and traceability, which are critical for financial integrity and can increase the risk of money falling into the wrong hands.”

It requires the Comptroller General to conduct an analysis on financial de-risking and submit a report to Congress by Jan. 1, 2022.

The analysis will:

 

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