Jun 4, 2025

Bank Secrecy Act

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Introduction

The Bank Secrecy Act (BSA) is a United States law that requires financial institutions to assist government agencies in detecting and preventing money laundering. Enacted in 1970, it is sometimes referred to as the Currency and Foreign Transactions Reporting Act.

Purpose of the BSA

What does the Bank Secrecy Act do?

The BSA requires banks and other financial institutions to keep certain records and file specific reports that could be helpful to detect and prevent financial crimes. This includes reporting cash transactions over $10,000, identifying customers, and maintaining records that could be useful to law enforcement agencies.

Key Provisions

What is the $3000 rule?

One of the rules under the BSA is the so-called “$3,000 rule.” This rule requires financial institutions to verify and record the identity of individuals involved in wire transfers and other money transfers of $3,000 or more. This helps authorities track suspicious activities and prevent illegal transfers of funds.

What is one new requirement of the Bank Secrecy Act?

Over the years, the BSA has been amended to include new requirements. For example, the USA PATRIOT Act expanded the BSA to require financial institutions to implement anti-money laundering programs and to perform enhanced due diligence on certain accounts. These new requirements are designed to strengthen the ability of financial institutions to detect and report suspicious activities.

Compliance and Enforcement

Financial institutions must comply with the BSA or face significant penalties. The Financial Crimes Enforcement Network (FinCEN) is the primary agency responsible for enforcing the BSA and issuing regulations and guidance to ensure compliance.

Related Laws

What are the bank secrecy laws?

Bank secrecy laws in the United States include the Bank Secrecy Act and related regulations that require financial institutions to maintain records and report certain transactions. These laws are intended to prevent and detect money laundering, terrorist financing, and other financial crimes by ensuring transparency in financial transactions.

Bank Secrecy Act