The Clearing House - a trade association representing the likes of JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), and Citigroup (NYSE:C) - for some time has questioned the effectiveness of current rules, but now may find a friendlier reception in D.C.
"Now we tell banks to file a (report) on everything that might be criminal," says the head of a compliance software maker, summing up the problem with the current rules. The number of suspicious activity reports rose to nearly 1M last year vs. 669K in 2013.
Compliance with the rules is costing U.S. companies up to $8B per year, according to the Heritage Foundation.
The new system to be proposed by The Clearing House envisions banks not investigating and reporting every red flag transaction, but instead looking into specific concerns relayed to them by law enforcement. Lenders in different parts of the country may, for instance, be on the lookout for different sorts of activity.