The Bank Secrecy Act (BSA) is a federal legislation enacted in 1970 to prevent financial institutions from being used to launder ill-gotten gains. The BSA is sometimes referred to as an "anti-money laundering" (AML) law or jointly as “BSA/AML” . The BSA authorizes the Department of the Treasury to impose reporting and other requirements on financial institutions and other businesses to help detect and prevent money laundering. Specifically, the regulations implementing the BSA require financial institutions to keep records of cash purchases of negotiable instruments, file reports of cash transactions exceeding $10,000 (daily aggregate amount), and to report suspicious activity that might signify money laundering, tax evasion, or other criminal activities.
The BSA applies to national banks, federal savings associations, and other businesses. The law requires businesses to keep records and file reports that are determined to have a high degree of usefulness in criminal, tax, and regulatory matters. The law also requires financial institutions to provide documentation to regulators whenever their clients deal with suspicious cash transactions involving sums over $10,000.
FinCEN (Financial Crimes Enforcement Network) administers the BSA and serves as the U.S. Financial Intelligence Unit. FinCEN has the authority to issue BSA regulations, examine financial institutions for compliance, and pursue enforcement actions for BSA-related violations. Financial institutions must use the electronic BSA Forms to comply with applicable filing requirements.
In summary, the Bank Secrecy Act (BSA) is a U.S. legislation created in 1970 to prevent financial institutions from being used to launder ill-gotten gains. The BSA authorizes the Department of the Treasury to impose reporting and other requirements on financial institutions and other businesses to help detect and prevent money laundering. The law requires businesses to keep records and file reports that are determined to have a high degree of usefulness in criminal, tax, and regulatory matters. FinCEN administers the BSA and serves as the U.S. Financial Intelligence Unit.
