Case Detail

Case Summary

Nonmarket Action and the International Counter-Money Laundering Act

Case Number: 5-411-756, Year Published: 2012

HBS Number: KEL649

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Authors: Timothy Feddersen; Kimia Rahimi

Key Concepts

Politics, Government Policy, Public Policy, Regulation, Society and Business Relations

Abstract

The case describes the international problem of money laundering and summarizes U.S. bank regulations aimed at reducing money laundering activities. The introduction of H.R. 3886 in 2000 was one in a series of attempts to formalize U.S. banks’ monitoring of their customers. The bill was prompted by a government report that named and criticized U.S. banks for laundering billions of dollars linked to drug trafficking, fraud, and organized crime. Interest groups in favor of H.R. 3886 were predominantly law enforcement agencies that viewed current anti-money laundering laws as ineffective. Groups opposed to the bill included the American Civil Liberties Union, which believed that the collection of more information about bank customers’ activities was an invasion of privacy, and the American Bankers Association, which claimed that the legislation would impose unnecessary costs on banks.

The case can be used to introduce the distributive politics framework for analyzing nonmarket issues and formulating non-market strategies in the context of government institutions. The epilogue reveals that H.R. 3886 died before it ever reached the House floor, but that an expanded version of the legislation ultimately passed—with the support of stakeholders who originally fought it—as part of the USA PATRIOT Act after the terrorist attacks of September 11, 2001. This stance reversal provides an opportunity to explore how events, public opinion, and the media can create windows of policy opportunity.

Learning Objectives

  • Utilize a framework for analyzing options for non-market action 
  • Formulate a strategy for non-market action 
  • Recognize how public opinion influences the opportunity for non-market action through events and/or new information, political actors, media coverage, and policy windows

Number of Pages: 4

Extended Case Information

Teaching Areas: Management

Teaching Note Available: Yes

Geographic: United States

Industry: Banking

Organization Name: Citigroup

Organization Size: Large

Decision Maker Position: Senior Vice President

Decision Maker Gender: Male

Year of Case: 2000-2001