With the recent passage of the Economic Growth, Regulatory Relief, and Consumer Protection Act, it isn’t being overly optimistic to think that Congress may pass the most meaningful relief from Bank Secrecy Act regulations. H.R.6068 – The Counter Terrorism and Illicit Finance Act, would update many reporting thresholds that haven’t been updated since the passage of the BSA in 1970, and it would demand Treasury frequently study the impact of these regulations upon the financial sector in relation to the benefits of reporting the data to law enforcement.

The main benefits that this legislation proposes are:

  1. The Currency Transaction Report threshold would increase from $10,000 to $30,000.
  2. The threshold definitions for Money Service Business would increase from $1,000 to $3,000.
  3. To review the filing deadlines of CTRs and SARS, adjusting thresholds for inflation, modification of requirements for continuing activity, the fields within a SAR, and other changes.
  4. To develop regulations that will create a process to apply for no action letter.
  5. To develop separate reports on:
    • Whether Treasury should take back exam authority over BSA issues.
    • How much actionable data is gathered on terrorist vs. non-terrorist cases.
    • The effectiveness of the Beneficial Ownership Rule.
    • The cost-benefit analysis of the whole BSA regulatory regime.
  6. Provides an 18-month safe harbor for compliance with the Customer Due Diligence rule.

While these changes would bring about great cost savings to financial institutions, law enforcement is unlikely to support reforms because it likes granular data produced by these reports and doesn’t have to pay for its collection. Presently, the bill is in the House Financial Services Committee but there is no hearing scheduled on this topic. However, we be vigilant in following the progress and vigorously support the passage of this bill.

Please contact Mike Lee, LSCU director of regulatory advocacy, governmental affairs, for additional details at michael.lee@lscu.coop.