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WOCCU supports global AML reg revisions
PARIS (4/5/12)--The World Council of Credit Unions (WOCCU) Tuesday said it strongly supports revisions to regulations developed by the Financial Action Task Force (FATF) designed to combat money laundering and terrorist financing, and supports the FATF's revised due diligence recommendations that can be scaled to acknowledge credit union members' relative lack of risk in these areas.

Click to view larger image World Council of Credit Unions' Michael Edwards (left) and Credit Union Central of Canada's David Phillips represented financial cooperatives to support revisions of regulations developed by the Financial Action Task Force designed to combat money laundering and terrorist financing. Edwards and Phillips also promoted credit unions' low-risk as money laundering targets. (Photo provided by the World Council of Credit Unions)
World Council representatives spoke to this issue at an April 2 FATF meeting at the Paris headquarters of the Organization for Economic Cooperation and Development, where the inter-governmental regulatory body is domiciled.

More than 100 participants attended the two-day meeting to discuss revisions to FATF's International Standards on Combatting Money Laundering and the Financing of Terrorism and Proliferation, better known as the 40 recommendations. WOCCU supports the recommendations overall, and especially the FATF's revised customer due diligence (CDD) recommendations that should apply to the relatively low-risk scenarios offered through credit unions, according to Michael Edwards, WOCCU chief counsel and vice president for advocacy and government affairs.

"World Council strongly supports the FATF's recommendations and interpretive notes regarding simplified CDD measures for lower risk customers and transactions," said Edwards, who represented the global credit union trade organization with David Phillips, president/CEO of Credit Union Central of Canada, a World Council member organization. "We asked the FATF to consider issuing additional guidance on this issue to help reduce regulatory burdens on credit unions when there is no indication of money laundering or terrorist financing."

The revisions WOCCU supports recognize the relative lack of risk generally offered by credit union members and their transactions. As natural-person financial cooperatives, credit unions do not serve corporate entities with opaque ownership structures that might easily hide criminal money laundering or terrorist activities, said WOCCU.

Language already exists within the CDD recommendations offering a simplified approach, which WOCCU believes will reduce regulatory burdens to levels appropriate to the general risk found in credit unions, Edwards explained. FATF reacted positively to WOCCU's comments, noting that while a simplified CDD could not uniformly apply to all credit unions on an institution-wide basis, national or provincial regulators could reduce regulatory burdens on credit unions in cases where members were likely to be low-risk.

FATF's revisions also indicate further recognition that credit unions generally pose less risk overall due to their cooperative nature and the role played by their member-owners, according to Brian Branch, WOCCU president/CEO.

"We urge FATF to recognize the value of financial cooperatives' relationships with their members through the simplified customer due diligence revisions," said Branch. "Credit unions continue to be a positive global economic force and recognition of that role by global regulatory bodies is necessary to maintain and protect that positive role that financial cooperatives fulfill."
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