BSA

Bank Secrecy Act

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 include:

1. Recordkeeping: Financial institutions must maintain records of certain transactions and customer information.
2. 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.
3. Customer Identification Program (CIP): Financial institutions must verify the identity of their customers and maintain records of the information used to verify their identity.
4. Anti-Money Laundering (AML) Program: Financial institutions must implement risk-based AML programs to detect and prevent money laundering and terrorist financing.
5. Information sharing: The BSA allows for information sharing between financial institutions and law enforcement agencies to combat financial crimes.

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. Failure to comply with BSA requirements can result in significant civil and criminal penalties for financial institutions and their employees.

• Abbreviation: BSA