Bank Secrecy Act (BSA)

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The Bank Secrecy Act (BSA) authorizes The Office of the Comptroller of Currency to evaluate bank activities and management processes for national banks, federal savings associations, federal branches, and agencies of foreign banks. The BSA expands on the Patriot Act and requires financial institutions to adopt thorough customer identification programs. Institutions are also required to create comprehensive Anti-Money Laundering (AML) programs to fulfill BSA compliance requirements.

BSA compliance programs include internal control mechanisms, independent testing, staff training, and the appointment of an Anti Money Laundering Compliance Officer (AMLCO). BSA compliant institutions file reports with a high degree of usefulness in criminal, tax, intelligence, and counter-terrorism matters. The BSA also requires banks to comply with the Know Your Customer (KYC) rules.

For example, institutions must file a suspicious activity report (SAR) within 30 days of suspicious or potentially suspicious activity. Similarly, currency transaction reports (CTR) are filed via Financial Crimes Enforcement Network (FinCEN) Form 112 for cash transactions exceeding $10,000. Financial organizations are commonly required to store SARs and CTRs on file for at least five years.

Warning: CTRs allow the U.S. government to monitor all transactions over the $10,000 threshold.
SARs and CTRs allow the U.S. government to monitor all withdrawals and transactions over the $10,000 threshold.