Biden or Trump? Possible Impacts of a New Administration on Financial Crimes Compliance

This is an excerpt - just the beginning and end - of a longer article I have posted on my website at Richards RegTech Consulting Article - Biden or Trump

Subtitle: And does FinCEN have a 95 percent “false positive rate” it needs to address?

The U.S. election is Tuesday, November 3rd. We’ll know soon thereafter whether the country will have a new Democratic Joe Biden administration or whether the current administration under Republican Donald Trump will continue for a second term. And we’ll also know whether the Senate stays with a Republican majority or flips and goes Democratic (control of the House of Representatives will likely remain with the Democrats).

Financial crimes professionals are asking about what a change in administration could mean for them. Let’s look at recent trends in four different aspects of financial crimes compliance: (i) the number of Suspicious Activity Reports (SARs) filed, (ii) the number and types of federal criminal cases, (iii) the number of Deferred Prosecution Agreements (DPAs) entered into by corporations, and (iv) referrals to FinCEN made by federal agencies for substantial potential BSA violations.

We will look at the period 2011 through 2019. The recent FinCEN Files investigation and articles from Buzzfeed News and the International Consortium of Investigative Journalists (ICIJ) used leaked SARs that had been filed from 2011 through 2017 (actually, there were also about 10 SARs a year from each of 2008, 2009, and 2010, but journalists haven’t focused on those, likely because they don’t reveal enough salacious information to fit their narrative). And 2019 is the last full year (federal government fiscal year running through September 30) that has available data. Also, this nine-year period includes the last four years of the Democratic Obama administration and the first two full years of the Republican Trump administration. So we can compare the two to see if there are any differences or trends.

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Conclusion

When we wake up on November 4th (although it could take longer, and technically some states are not required to certify their votes until early December) we will either have a new Democratic administration under former Vice-President Joe Biden, or the current Republican administration under President Donald Trump will remain for another four years. Looking at trends in criminal cases against both individuals and corporations (with the latter represented by Deferred and Non-Prosecution Agreements), and trends in enforcement actions brought by FinCEN, we can expect real differences between a Biden administration – more financial crimes-related cases and enforcement actions – and a Trump administration – less. Regardless of the incoming administration, though, we should probably take a closer look at the referrals being made by the regulatory agencies to FinCEN, and how FinCEN is managing them (five months to three years to make a decision on a referral) and closing them: 95 percent "false positives" is inefficient and ineffective in the public sector as well as the private sector.

For the full article, see https://regtechconsulting.net/uncategorized/biden-or-trump-possible-impacts-of-a-new-administration-on-financial-crimes-compliance/