Correspondent Banking: A Gateway to Money Laundering Requires Heightened Scrutiny

Fifteen years ago, the Senate Permanent Subcommittee on Investigations flagged correspondent banking as a “Gateway for Money Laundering.”¹ The voluminous report highlighted a number of deficiencies with banks maintaining their correspondent banking relationships. Such deficiencies presented a significant money laundering risk to the U.S. financial system. Now, enforcement actions highlighting these deficiencies continue. Recent reports continue to flag the money laundering risks associated with correspondent banking.² In this era of heightened scrutiny with compliance with Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) controls, continued review and updating of compliance protocols is imperative to mitigate enforcement risks to financial institutions.