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In N.Y., New Rules For Banks To Stanch Flow Of Terrorist Financing

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Banking regulators in New York have enacted new rules aimed at stopping the flow of money used to fund terrorists. The new rules could mean criminal charges for banks that allow terrorist money to pass through.

Banks already spend millions of dollars a year on computer filters designed to catch suspicious transactions linked to terrorists. These new rules make bank employees certify that they are using the best filters out there.

Former prosecutor and director of the financial consulting firm Duff & Phelps, Polly Greenberg said, "It does create another mechanism where individuals have to take personal responsibility for the effectiveness of their policies and procedures."

The new rules also beef up New York's authority over banks. The state has become increasingly aggressive in punishing financial crimes. And this gives the state an even bigger club to swing at banks.

New York's place at the regulatory table has increased fines to atmospheric levels. New York has also forced banks to fire bad employees and threatened to revoke one bank’s ability to do business in New York.

Charles is senior reporter focusing on special projects. He has won numerous awards including an IRE award, three SPJ Public Service Awards, and a National Murrow. He was also a finalist for the Livingston Award for Young Journalists and Third Coast Director’s Choice Award.