Bank Secrecy Act and Enforcement
Bank Secrecy Act/Anti-Money Laundering Act (BSA/AML) requirements place ongoing pressure on community banks to detect and prevent financial crimes. Identify the key components of BSA/AML compliance, including customer due diligence, suspicious activity reporting, and risk-based monitoring.
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Position & Background
- ICBA opposes the mandatory collection of beneficial ownership information of legal entities regardless of risk by financial institutions. Rather, this information should be universally collected by FinCEN at the time an entity is formed. However, financial institutions should have access to and rely on this information to assist them in performing customer due diligence.
- ICBA strongly recommends raising Currency Transaction Reporting (CTR) and Suspicious Activity Reporting (SAR) thresholds with future increases linked to inflation. The CTR threshold should be raised from $10,000 to $30,000.
- ICBA supports Bank Secrecy Act/Anti-Money Laundering (BSA/AML) reforms that will ease compliance burdens while providing more useful data to law enforcement.
- ICBA urges FinCEN to develop an effective communication mechanism between law enforcement, FinCEN, and banks.
- Nonbank institutions that perform “bank-like” functions and offer financial services should be subject to the same AML/BSA laws and regulations as banks.
- ICBA encourages the Office of Foreign Asset Control to streamline and simplify watch-lists of terrorists for ease of reference and application by bankers.
- ICBA urges FinCEN to take a leadership role in combatting ransomware, synthetic IDs, check and debit card fraud, frauds related to virtual currencies, and other types of fraud. FinCEN needs to also increase proactive communications pertaining to frauds to ensure banks are equipped to combat them.
Community bankers are committed to supporting balanced, effective measures to prevent terrorist financing and money laundering. However, because BSA/AML requirements are outdated, community banks doubt their effectiveness.
ICBA supports statutory and regulatory changes that would make BSA/AML requirement more targeted, efficient, and effective. Community banks should be relieved from the collection of beneficial ownership information, which is already collected at the time a legal entity is formed. Today’s outdated SAR and CTR thresholds promote over-filing and dilute their value to law enforcement.
Treasury is required by the 2020 Anti-Money Laundering Act to conduct a study on whether it is appropriate to raise these thresholds. Higher thresholds will result in more valuable information and reduce community bank burden. SARs will have more value if they are appropriately risk-based.
More generally, BSA requirements should be flexible, easily applied, and effectively communicated. Congress and the agencies should continue to work with industry to reduce community banks’ mounting costs and regulatory burdens. Additional guidance is needed that is understandable and easily applied. Community banks must understand the methods of terrorist financing and money laundering they are trying to prevent.
Finally, the federal government should have consistent regulations across all financial services providers including nonbank entities.
Letters & Testimonies
Comments on Beneficial Ownership Information Access and Safeguards
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