Influencing policy: Advancing smarter Bank Secrecy Act (BSA) rules for community banks
ICBA Expert Contact
Overview
BSA/AML requirements have not kept pace with today's risks. Outdated reporting thresholds, duplicate data collection requirements, and inconsistent rules for banks and nonbank providers increase compliance burden without improving results.
ICBA supports a more effective approach to BSA/AML compliance. This includes increasing Currency Transaction Reporting (CTR) and Suspicious Activity Reporting (SAR) reporting thresholds, removing beneficial ownership information collection rules, promoting consistent standards across financial service providers, and addressing emerging threats such as ransomware, synthetic identities, and payments fraud.
By advocating for practical reforms and clear guidance, ICBA helps community banks focus their time and resources on what matters most: protecting customers, supporting communities, and combating financial crime.
Modernize BSA/AML requirements to reduce burden and improve the value of information provided to law enforcement.
Shift beneficial ownership collection to government agencies and provide banks reliable access to that data.
Raise CTR and SAR reporting thresholds and index them to inflation.
Apply the same BSA/AML standards to nonbank providers performing bank-like activities.
Streamline Office of Foreign Asset Control watch lists to improve usability and compliance efficiency.
Strengthen FinCEN leadership on emerging threats, including ransomware, synthetic identities, virtual asset-related crime, and payments fraud.
Advocacy Impact & Progress
Through ongoing engagement with Congress, regulators, and industry stakeholders, ICBA is advancing practical BSA/AML reforms that better align regulatory requirements with today's risk environment.Get Involved
Help shape the future of BSA/AML policy by engaging in ICBA advocacy efforts and ensuring community bank perspectives are heard by policymakers and regulators.Policy Position and Background Information
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ICBA supports Bank Secrecy Act/anti-money laundering (BSA/AML) reforms that will ease compliance burdens while providing more useful data to law enforcement.
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ICBA urges FinCEN to take a leadership role in combating ransomware, synthetic IDs, check and debit card fraud, frauds related to virtual currencies, and other types of fraud. FinCEN should increase proactive frauds-related communications to ensure banks are equipped to combat them.
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ICBA encourages the Office of Foreign Asset Control to streamline and simplify watchlists of terrorists for ease of reference and application by banks.
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Nonbank institutions that perform “bank-like” functions and offer financial services should be subject to the same BSA/AML laws and regulations as banks.
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ICBA strongly recommends raising CTR and SAR thresholds with future increases linked to inflation. The CTR threshold should be raised from $10,000 to $30,000.
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ICBA opposes the mandatory collection of beneficial ownership information by financial institutions of legal entities. Rather, this information should be universally collected by the appropriate government agency. Financial institutions should have access to and the ability to rely on this information to assist them in performing customer due diligence.
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 requirements 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.
Customer Data Access/Open Banking
Section 1033 of the Dodd-Frank Act gives consumers the right to access their financial records in electronic form. In 2024 the CFPB finalized a rule implementing Section 1033.
Fraud & Scams
Fraud is a persistent challenge, and community banks feel the impact deeply—whether losses affect the institution or a valued customer. By knowing their customers and communities, community banks are well positioned to discourage fraud attempts, identify issues early, and help minimize losses when fraud occurs.