House Subcommittee Considers AML De-Risking

The U.S. House Subcommittee on Financial Institutions and Consumer Credit considered testimony regarding the implications of "de-risking," wherein financial institutions end relationships and close the accounts of "high-risk" clients to avoid legal liability and regulatory scrutiny. The subcommittee noted that de-risking (i) may affect "many legitimate businesses," (ii) could reduce access by small businesses to financial products domestically, and (iii) could affect the flow of humanitarian aid globally.

Witnesses at the hearing included Michael E. Clements, Director of Financial Markets and Community Investment of the Government Accountability Office ("GAO"); Sue E. Eckert, Adjunct Senior Fellow at the Center for a New American Security; Gabrielle Haddad, Chief Operating Officer of Sigma Ratings Inc.; John Lewis, Senior Vice President of Corporate Affairs and General Counsel at the United Nations Federal Credit Union on behalf of the National Association