In a notable shift in U.S. financial oversight, Treasury Secretary Scott Bessent announced that banks will now be allowed to de-prioritize lower-risk anti-money laundering (AML) activities. The move is designed to help financial institutions focus their efforts and resources on higher-risk threats, while reducing the compliance burden—especially for community banks and smaller lenders.
Bessent, speaking at the Economic Club of New York, emphasized that current post-financial crisis regulations are outdated and overly focused on procedural compliance. He argued that the financial system needs to evolve and shift toward a smarter, risk-based model that tackles real threats rather than checking boxes.
According to Bessent, this change will allow regulators and banks to focus more on outcomes rather than paperwork. Institutions will be guided to concentrate on meaningful financial risks, such as large-scale money laundering, fraud, and illicit finance, instead of spreading resources thin across low-risk areas.
This new policy direction is part of a broader effort to modernize financial regulations and streamline compliance frameworks. It reflects a growing understanding in the financial sector that a one-size-fits-all approach to AML no longer works in today’s environment of complex financial threats and rapidly changing technology.
Reactions to the announcement have been mixed. Supporters see this as a necessary modernization that will free up compliance teams to focus on critical threats. Critics, however, worry that easing scrutiny in any area—no matter how low the perceived risk—could create loopholes and allow bad actors to exploit less-watched channels.
As the policy takes shape, banks are expected to re-evaluate their AML strategies and adjust internal systems to match these risk-based priorities. The long-term impact will depend on how effectively financial institutions can balance efficiency with vigilance.
