A U.S. law enacted in 1970 to prevent financial institutions from being used as tools for hiding or laundering money tied to criminal activity. The BSA is sometimes called the Currency and Foreign Transactions Reporting Act. The primary purpose of the BSA is to fight money laundering, terrorist financing, and other financial crimes by requiring U.S. financial institutions to assist government agencies in detecting and preventing these illegal activities. The BSA is administered by the Financial Crimes Enforcement Network (FinCEN), a U.S. Department of the Treasury bureau.
Key Provisions of the BSA
The BSA includes several key provisions designed to combat financial crimes:
- Recordkeeping: Financial institutions must maintain records of certain transactions and customer information.
- Reporting: Financial institutions must file reports with FinCEN for certain transactions, such as Currency Transaction Reports (CTRs) for cash transactions exceeding $10,000 and Suspicious Activity Reports (SARs) for transactions that may indicate criminal activity.
- Customer Identification Program (CIP): Financial institutions must verify the identity of their customers and maintain records of the information used to verify their identity.
- Anti-Money Laundering (AML) Program: Financial institutions must implement risk-based AML programs to detect and prevent money laundering and terrorist financing.
- Information sharing: The BSA allows for information sharing between financial institutions and law enforcement agencies to combat financial crimes.
Amendments to the BSA
The BSA has been amended several times since its enactment, notably by the USA PATRIOT Act in 2001, which expanded the scope of the BSA to combat terrorist financing in the aftermath of the 9/11 attacks.
Penalties for Non-Compliance
Failure to comply with BSA requirements can result in significant civil and criminal penalties for financial institutions and their employees. These penalties can include fines, imprisonment, and other legal consequences.
Reporting Thresholds
The BSA requires individuals to report any currency exceeding $10,000 when entering or leaving the United States. This threshold has not been adjusted for inflation since 1970, which would be equivalent to $82,905 in 2025.
