The additional companies that must implement programs include mutual funds, credit-card system operators, money-transfer companies and check cashiers, securities brokers and dealers registered with the Securities and Exchange Commission, and futures commission merchants.
Jeanne Capachin, research director at Meridien Research, says the Patriot Act, in a nutshell, requires financial institutions to compare the identities of new customers, as well as existing customers, to continually updated government lists of "money launderers, drug dealers, terrorists, or other enemies of the state," then report matches to the federal government. Those funds can be frozen or seized by the federal government, she says.
While smaller financial institutions might be able to check their customer lists manually, larger institutions require more automated systems, such as installing third-party software packages. Such a product is available from Thomson Financial, she says.
The Treasury Department's move to require more companies to comply with the Patriot Act, Capachin says, "closes loopholes and tightens the financial noose" around criminals.