CDD (customer due diligence) became a rule on May 11, 2018 [1]. FINCEN forced banks to do it. Even though it is not in Bank's best interest to go through this e

CDD (customer due diligence) became a rule on May 11, 2018 [1]. FINCEN forced banks to do it. Even though it is not in Bank's best interest to go through this exercise at all, they are forced by regulatory laws. There is a whole group at every bank dedicated to this: compliance teams, led by a chief compliance officer. Every bank is examined by internal auditors, external auditors, regulators to see whether a bank is in compliance. Yes, banks run by people; laws are written by people; regulators are people. The issue is not people per se: which set of people has MORE discretion? In this case, compliance teams at banks don't have much discretion. FINCEN has discretion to fill up the content of laws in the name of new rules. Recently, Congress has started attacking this AML-regulation beast; there are a couple of bills in congress, which can ease AML compliance burden. By the time, any reforms are passed, KYC (know your customer, EDD (enhanced due diligence), and CDD (customer due diligence) become the status quo. Of course, we could have expected Banks to push back, by sending lobbyists to rewrite laws. Banks are also helped by software tools to generate letters, file SAR(suspicious activity reports), CTR (currency transaction reports), etc. If there were no automated way of doing these, yes, they would have gone to Congress to push back. As long as there is some automation, expect more of this surveillance. [1] https://www.fincen.gov/news/news-releases/fincen-reminds-financial-institutions-cdd-rule-becomes-effective-today https://www.fincen.gov/news/news-releases/fincen-reminds-fin...