The 2015 National Money Laundering Risk Assessment (“NMLRA”), produced by Treasury’s Office of Terrorist Financing and Financial Crime (“TFFC”), is an impressive document and an excellent resource on money laundering in the United States. Covering over 90 pages, it analyses every sector of the U.S. financial system and assesses the money-laundering threats, vulnerabilities, consequences, and overall risk to that sector. However it contains one glaring omission that is, while not money laundering itself, a result of efforts to crack down on money laundering.

At no point in the NMLRA is the subject of derisking even mentioned.

Derisking is a phenomenon where banks shut down entire lines of business or drop certain categories of customers due to real or perceived regulatory risk. Derisking has resulted in significant issues in facilitating remittances to places such as Somalia, difficulties for non-profits operating in high-risk jurisdictions, and the drying up of correspondent banking channels.

Not only does derisking result in negative externalities such as described above, by driving ostensibly legitimate business underground into lesser regulated channels, it may actually contribute to money laundering, or at least hinder regulators’ ability to monitor it and law enforcement ability to combat it.

It is not as though U.S. and international regulators are not aware. The subject has been addressed on numerous occasions by Treasury officials, including Terrorism and Financial Intelligence Undersecretary Adam Szubin, his predecessor David Cohen, and FinCEN Director Jennifer Shasky Calvery. The problem has become severe enough that the Financial Action Task Force (“FATF”) felt compelled to issue clarifying guidance on the subject late last year.

Yet for some reason the NMLRA is silent on the matter. We’ve reached out to Treasury for comment and will provide an update if we hear back.