Time To Update The BSA

March 12, 2019 at 9:08 am Leave a comment

One of the great things about going to events like CUNA GAC is that since you’re surrounded by so many people who actually find issues like regulatory compliance interesting, if you just keep your ears open you end up learning a heck of a lot.

For example, yesterday I chatted with an erstwhile colleague who told me that Congress is in the early stages of examining the Bank Secrecy Act. Sure enough, the House Financial Services Committee will be holding a hearing tomorrow on detecting corporate crime. The proposals to be discussed are in the draft stages but the issues to be examined got me thinking that it truly is time to update the Bank Secrecy Act.

For example, financial institutions were first required to report cash currency transactions of $10,000 or more pursuant to a 1970 federal law. Adjust that for inflation and it becomes clear that what was originally intended as a clear red flag of criminal activity has lost much of its meaning. After all, $10,000 doesn’t even pay for a lot of weddings these days.

And then there are the other numerical thresholds such as those triggering mandatory SAR filings. Should these be adjusted for inflation?

Incidentally, the libertarian in me gets a little nervous when I see just how integral the banking system has become to the law enforcement community. According to the committee memorandum, in the last five years alone law enforcement officials have made more than 10 million FinCen database queries. This includes 126,000 annual queries from the Internal Revenue Service. In addition, more than 21% of the FBI’s criminal investigations involved BSA data. 

I will be listening to the committee hearing at some point. It seems to me that whether you’re an apolitical compliance professional who simply has to dedicate time and energy to a multitude of reporting mandates, a civil libertarian or a law enforcement official who understands the importance of the BSA framework to protecting American citizens, the Bank Secrecy Act could use a tune up that makes it a bit more efficient and useful for everyone.


Entry filed under: Economy, New York State, Political. Tags: , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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