Main Street Matters ICBA Blog

Streamlining the Bank Secrecy Act

Jul 18, 2018

lily-thomas-150pxBy Lilly Thomas

As ICBA continues working to build on the regulatory relief that passed under the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155), we recently advanced the debate on modernizing the Bank Secrecy Act in a new white paper.

Issued while Congress and the regulatory agencies work toward BSA reform, ICBA’s “Modernizing Anti-Money Laundering and Anti-Terrorist Financing Laws and Regulations” white paper focuses on how to streamline the framework while improving its effectiveness.

The white paper recommends the following reforms:

  • Update Reporting Thresholds: Policymakers should increase mandatory reporting thresholds for currency transaction reports from $10,000 to $30,000 and for suspicious activity reports from $5,000 to $10,000 to emphasize quality over quantity in information collection.
  • Reclaim Responsibility: The government should collect beneficial ownership records at the time a legal entity is formed if it wants this information, rather than requiring private-sector financial institutions to do it for them.
  • Enhance Communication: The government should provide more current information on specific methods of terrorist financing and money laundering to help community banks more readily identify and report truly suspicious transactions.
  • Promote Balance: While community banks are eager to cooperate with law enforcement, they should not act as police. Creating a tax credit to offset the cost of BSA compliance would recognize the governmental, law-enforcement function of fighting financial crime.

While community banks continue investing more of their time, money and resources to combat criminal activity, the current framework is too often an exercise in completing forms and meeting paperwork requirements.

Modernizing the Bank Secrecy Act will produce more useful information for law enforcement while alleviating one of the costliest community bank compliance burdens. ICBA looks forward to working with policymakers on this much-needed initiative.

Read the ICBA White Paper

Lilly Thomas is ICBA senior vice president and senior regulatory counsel.