Bank Secrecy Act and Know Your Customer (KYC) Guidelines
The Bank Secrecy Act was enacted to combat money laundering. Congress enacted the legislation making money laundering itself a federal crime.

The money laundering statutes have far reaching implications for banks. For instance, any employee, or agent of Eastern Bank, who conducts a financial transaction without knowing that the proceeds involved are the revenues from drug sales can still be found guilty of money laundering if it were proven he knew the money came from some type of criminal activity.

Knowledge has been considered to include the concepts of "willful blindness", "deliberate ignorance" and "conscious avoidance." Thus, if a bank employee, or agent of Eastern Bank, suspects that someone may be laundering "dirty money" but deliberately refuses to ask questions or report the activity to superiors because s/he wants to remain ignorant, the employee and Eastern Bank could be considered to have knowledge for purposes of assessing criminal liability.

In addition to the BSA, the regulatory agencies "Know Your Customer Guidelines" have been established, which require financial institutions to know whom it is lending money to and for what purpose the funds will be used.

Any bank is:

• Prohibited from making loans for the purpose of laundering money or for any other criminal activity
• Required to identify its customers