Short answer: In the U.S., adverse media screening isn't explicitly required by law, but if your institution isn't doing it, regulators may still see that as a problem.
As financial institutions face growing expectations around Anti-Money Laundering (AML) compliance, adverse media screening has emerged as one of the most scrutinized components of a modern compliance program. But many still ask the foundational question: is adverse media screening required by U.S. law, or is it just a best practice? Let’s break it down.
U.S. regulators have not passed a statute that mandates adverse media screening for all customers. For instance, FinCEN’s Customer Due Diligence (CDD) rule makes it clear: banks are not categorically required to perform negative news checks on every client.
“The CDD rule does not categorically require the performance of media searches or particular screenings for all customers.”
— FinCEN
But that’s not the full story. While not a legal requirement in every case, adverse media screening software is strongly encouraged through guidance, enforcement expectations, and examination procedures. It has become a cornerstone of a well-structured, risk-based AML program.
The U.S. AML regime is built on a risk-based approach — meaning institutions are expected to tailor due diligence to the level of risk presented by each customer. For low-risk individuals, minimal information may suffice. But for high-risk entities, such as politically exposed persons (PEPs), clients in high-risk geographies, or industries vulnerable to financial crime, regulators expect much more.
That’s where adverse media screening solutions come into play.
The FFIEC BSA/AML Examination Manual clearly states that banks should have policies to determine when, based on risk, obtaining and reviewing negative media is appropriate. If there’s public information signaling a red flag and your institution misses it, regulators could view that as a failure to meet your “know your customer” (KYC) obligations.
Adverse media screening isn't just about reacting to breaking new, it's about identifying early warning signs before they become enforcement headlines.
TAke the case of Adita Hurtado Olascoage, a figure linked to the Mexican cartel La Familia Michoacana. Sigma360's adverse media screening solution had flagged this name in 2022, long before Olascoage was officialy sanction in April 2025.
An in-depth article by El País from 2022 provided substantial open-source intelligence on the cartel's structure, its role in regional violence, and the individuals fueling its operations. These insights were publicly available, yet easily missed without proper screening.
Let’s look at some key sources:
In other words, if you’re not using adverse media screening software to identify high-risk relationships, you may be seen as missing a core piece of the due diligence puzzle.
Over time, adverse media screening has moved from a “nice-to-have” to a baseline expectation. Industry commentary around FinCEN’s 2018 CDD Final Rule underscores this shift, noting that institutions are now expected to “continuously monitor media sources” as part of ongoing risk assessments.
Even without a codified rule, failure to detect and respond to negative media about a client can lead to enforcement action — especially if the missed red flag contributes to undetected fraud, money laundering, or sanctions exposure.
Adverse media screening may not be explicitly written into every regulation. But practically speaking, U.S. financial institutions treat it as a compliance requirement, and with good reason. Regulatory expectations have outpaced the letter of the law, and adverse media checks are now a fundamental component of risk-based AML programs.
Whether you're a bank, fintech, or payments provider, choosing the right adverse media screening software matters. You need solutions that offer:
That's exactly what Sigma360 delivers. Our platform was named the #1 Adverse Media Solution by Chartis Research in 2025 — a recognition of our leadership in helping institutions surface true risk, reduce false positives, and meet evolving regulatory expectations with confidence.
If your compliance team is still relying on manual searches or outdated tools, now’s the time to modernize. Discover how Sigma360’s AI-powered adverse media screening software helps you surface the risks that matter, and skip the rest.
👉 Request a demo or get in touch with our team to see it in action.