In Episode 6 of the FinCEN Report Podcast, our CEO Jonathan Wilson spoke with Sarah Beth Felix, an AML compliance expert and Founder and CEO of Palmera Consulting. Felix, who has authored numerous papers on AML compliance and frequently consults with banks and financial institutions, shared her insights on AML issues, the Corporate Transparency Act (CTA), and the challenges small businesses face in maintaining their confidential information.
About Sarah Beth Felix
Felix discussed her journey from being a stockbroker to becoming an anti-financial crime professional, a career change sparked by the events of 9/11. Her work spans traditional financial institutions like banks and credit unions to global fintechs, crypto, and crypto cannabis companies. Despite there being no degree in AML compliance when she started, Felix pursued a master’s in forensic studies, which was the closest related field available at the time.
The Role of AML Compliance Experts
Often, financial institutions seek Felix’s expertise after receiving criticism or formal consent orders from bank regulators. She highlighted that her clients usually contact her when there’s a gap in their AML compliance practices. She assists them in operationalizing money laundering and sanctions risks, leveraging her ability to anticipate how criminals might exploit payment systems.
The Impact of the Corporate Transparency Act
Felix expressed her support for the CTA, noting that it aligns the United States with its peer countries in collecting beneficial ownership information. She analyzed that the U.S. is late to adopt these measures and pointed out the irony of offshore practices within onshore states like Delaware, Wyoming, and Nevada. Felix emphasized the importance of the act in removing the veil of anonymity from business ownership, thus aiding in investigative efforts for financial institutions.
Despite the benefits, Felix acknowledged concerns over privacy and the risk of identity theft, especially when sensitive information such as driver’s licenses must be collected and submitted to government agencies. She discussed the discomfort business owners might feel in handling the personal information of other owners and commended solutions that offer secure, efficient ways to manage and submit this data.
Trust and Compliance Among Business Owners
Felix speculated that business owners might trust attorneys or banks more readily than other intermediaries when it comes to handling their confidential information for compliance purposes. She urged businesses to adopt systems for managing information flows to ensure they meet the new reporting requirements timely and accurately.
Closing Remarks on the CTA’s Role in Anti-Money Laundering
In closing, Felix encouraged small business owners to view the CTA as a part of a larger effort to combat financial crimes. By maintaining compliance and contributing to the transparency of business ownership, they play a role in the global fight against money laundering and other illicit activities. She reassured businesses that, while the act introduces new responsibilities, its implementation can be straightforward with the right approach and tools.
