Dec 10 (Reuters) - The U.S. Treasury Department has proposed taking a more central role in the enforcement of anti-money-laundering rules in a bid to overhaul a system for catching illicit transactions by drug traffickers, the Wall Street Journal reported on Wednesday.
The proposal could give the Treasury's Financial Crimes Enforcement Network the ability to veto a finding by another regulator that a bank has infringed on the Bank Secrecy Act, the report said, citing a draft term sheet circulated to the nation’s banking regulators.
U.S. President Donald Trump has launched an offensive against alleged drug-trafficking and stepped up efforts at drug enforcement, with actions including targeted missile strikes that have killed dozens.
Bank regulators and the Treasury Department did not immediately respond to requests for comment.
Under the proposal, the Treasury could allow banks in some cases to avoid being penalized by regulators for what the Treasury views as mere technical violations of their anti-money-laundering systems.
In October, Treasury Secretary Scott Bessent said, opens new tab that bank regulators and his department's Financial Crimes Enforcement Network (FinCEN) were working on new rules for an effective anti-money laundering program.
Trump-led regulators have taken steps to loosen regulations, with all three federal bank regulators announcing this year they would no longer police banks on so-called "reputational risk," wherein supervisors could sanction institutions for activities that are not strictly prohibited but could expose the bank to negative publicity or costly litigation.
Reporting by Hyunsu Yim and Kanjyik Ghosh in Barcelona; Editing by Andrew Heavens and Nick Zieminski
