Bank Secrecy Act (BSA)

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On January 1, 2021, the United States Congress enacted the Anti-Money Laundering Act of 2020 (the “AMLA”), as part of the National Defense Authorization Act (the “Act”).  The AMLA includes extensive and fundamental reforms to anti-money laundering (“AML”) laws in the United States, including the Bank Secrecy Act (“BSA”).

In a previous client alert,…

On November 19, 2020, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Financial Crimes Enforcement Network, National Credit Union Administration, and Office of the Comptroller of the Currency (collectively, the “Agencies”) issued a joint fact sheet clarifying how banks subject to the Bank Secrecy Act (“BSA”) should apply a risk-based approach to customer due diligence (“CDD”) requirements for charities and other non-profit organizations.
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Continue Reading Federal Banking Agencies and FinCEN Issue Joint Statement on Risk-Based Approach to Customer Due Diligence for Charities and Non-Profit Organizations

As we noted in a client alert late last week, the federal banking agencies released on August 13, 2020, a joint statement on enforcement of Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”) requirements.  At the time, the Federal Deposit Insurance Corporation made reference to a possible separate “Statement on Enforcement of the Bank Secrecy Act” from FinCEN. …

On Friday, the leaders of the Securities and Exchange Commission (“SEC”), Commodity Futures Trading Commission (“CFTC”), and Financial Crimes Enforcement Network (“FinCEN”) (collectively, the “Agencies”) issued a “Joint Statement on Activities Involving Digital Assets” (the “Joint Statement”).  The Joint Statement serves as a reminder that businesses engaged in activities involving digital assets – or, as they are sometimes called, virtual currencies or cryptocurrencies – should be attentive to their anti-money laundering (“AML”) obligations, including under the Bank Secrecy Act (“BSA”).

The Joint Statement notes that the BSA requires “financial institutions” to:  (1) establish and implement an effective AML program; and (2) comply with certain recordkeeping and reporting requirements, including the filing of suspicious activity reports (“SARs”).  These requirements apply not just to a financial institution’s traditional lines of businesses, but also to its businesses involving digital assets.

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Continue Reading Leaders of the SEC, CFTC, and FinCEN Issue Joint Statement Emphasizing AML Obligations for Digital Asset Activities

On July 22, 2019, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency (collectively, the “federal banking agencies”), and the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued a joint statement emphasizing their risk-focused approach to examinations of banks’ Bank Secrecy Act/anti-money laundering (“BSA/AML”) compliance programs (the “Statement”).  The Statement does not purport to create additional supervisory expectations for banks, but is meant to provide transparency into the risk-focused approach the agencies use for planning and performing BSA/AML examinations.  While the Statement largely restates existing rules and guidance and notes “it does not establish new requirements,” the fact that the agencies issued the statement may itself be an important, albeit implicit, acknowledgement of concerns expressed by some that BSA/AML examinations have become increasingly less risk-based in practice.
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Continue Reading Federal Banking Agencies and FinCEN Release Statement on Risk-Focused BSA/AML Supervision

On May 9, 2019, the House Financial Services Committee (“HFSC”) unanimously approved an amendment in the nature of a substitute to H.R. 2514, the Coordinating Oversight, Upgrading and Innovating Technology, and Examiner Reform Act (the “COUNTER Act” or the “Act”).  The COUNTER Act, introduced by Representative Emanuel Cleaver (D-MO) would be the first major reform of the Bank Secrecy Act, 31 U.S.C. §§ 5311 et seq. (“BSA”) and related anti-money laundering (“AML”) regulations since 2001.  The COUNTER Act will now move to the House floor for debate.  The HFSC postponed a vote on a related bill that is aimed at combating illicit financial activity in anonymous shell companies and that would require most corporations and limited liability companies to disclose beneficial ownership information at the time of incorporation.
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Continue Reading House Financial Services Committee Passes BSA/AML Overhaul Legislation

Representatives of the Office of the Comptroller of the Currency (“OCC”), the Financial Crimes Enforcement Network (“FinCEN”), and the Federal Bureau of Investigation (“FBI”) testified on Thursday, November 29 before the Senate Committee on Banking, Housing, and Urban Affairs (“Banking Committee”) on anti-money laundering (“AML”) issues.

The testimony highlighted some tensions between the views of the different regulators, with the OCC appearing to be supportive of providing some regulatory relief to financial institutions, while FinCEN continues to see the value of the current requirements under the Bank Secrecy Act (“BSA”). Coming on the heels of reports that a bipartisan group of Senators are working on BSA reform legislation, the testimony revealed that FinCEN at least may prove reluctant to support some of the proposed reforms.

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Continue Reading Senate Testimony Highlights Tensions in BSA/AML Reform Efforts as Lawmakers Consider Bipartisan Legislation

On October 3, the Board of Governors of the Federal Reserve System (“Federal Reserve”), the Federal Deposit Insurance Corporation (“FDIC”), the National Credit Union Administration (“NCUA”), the Office of the Comptroller of the Currency (“OCC”), and the U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) released an Interagency Statement on Sharing Bank Secrecy Act Resources (the “Statement”). The Statement encourages banks to consider entering into collaborative arrangements to manage their Bank Secrecy Act (“BSA”) and anti-money laundering (“AML”) compliance obligations. The Statement uses the BSA’s definition of “bank,” which includes each agent, agency, branch, or office within the United States of banks, savings associations, credit unions, and foreign banks.
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Continue Reading Regulators Encourage Lower-risk Banks to Join Forces for Bank Secrecy Act and AML Compliance

The Senate Banking Committee held its first hearing of 2018 earlier this week to discuss potential reform of the current U.S. regulatory framework for combating money laundering and other forms of illicit financing.  Current proposals for reform include raising the mandatory reporting thresholds for currency transactions and suspicious activity, requiring the collection of beneficial ownership information for U.S. companies at the time of incorporation, and allowing greater information sharing among financial institutions and the government.  The potential reforms are receiving initial bipartisan support on some key issues as legislators from both parties have voiced concerns over the need to update the current Bank Secrecy Act (BSA)/Anti-Money Laundering (AML) regulatory regime.
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Continue Reading Senate Banking Committee Holds Hearing on Reform of Regulations Related to Money Laundering and Other Illicit Financing Activities

On October 25, 2016, the Financial Crimes Enforcement Network (FinCEN) issued an Advisory to financial institutions to (i) clarify reporting requirements under the Bank Secrecy Act (BSA) for filing Suspicious Activity Reports (SARs) on cyber-attacks and cyber-enabled crimes, (ii) note what information financial institutions should include in such reports, and (iii) encourage financial institutions to share information on cyber-attacks within the institution itself, with other banks, and with FinCEN and other regulators as appropriate.  The Advisory states that it is not designed to change current law.
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Continue Reading FinCEN Issues Advisory on Suspicious Activity Reporting Requirements for Cyber-attacks Under the Bank Secrecy Act