The history of the Bank Secrecy Act (BSA) and the regulatory enforcement framework used by the Financial Crimes Enforcement Network (FinCEN) can be very complicated and confusing to understand. However, know that a determined Bank Secrecy Act compliance lawyer can help guide you through this process so that you can be prepared for your investigation and know what to expect. Read on to learn more about how a qualified BSA attorney could be of assistance to you.

Background of the Bank Secrecy Act

Enacted in 1970, the Bank Secrecy Act (BSA) has provided for civil and criminal penalties against individuals or businesses that violate its provisions. The primary obligation imposed on financial institutions and businesses prior to 1996 was to file Currency Transaction Reports (CTRs). CTRs had to be filed whenever there was a cash or currency transaction worth over $10,000 conducted by, or on behalf of, one individual, as well as multiple currency transactions that aggregated to be over $10,000 in a single day.

Anti-Money Laundering Programs and Compliance

In 2001, banks, financial institutions, and other businesses were required to establish anti-money laundering programs (AML) that included the following:

  • The development of internal policies, procedures, and controls
  • The designation of a compliance officer
  • An ongoing employee training program
  • An independent audit function to test programs

The BSA imposes a legal obligation on banks and other businesses to know their customers’ business, the source of their customers’ money, and the type of transactions that are typical for their customers. Banks have an obligation to report or, in some cases, to refuse to conduct transactions they find suspicious—those that appear to be from an illegitimate source, have no legitimate business purpose, or are out of character with what they understand their customers’ business to be. Willfully failing to establish or maintain an effective AML program may subject an individual or business to criminal or enhanced civil penalties.

Regulatory Enforcement of the Bank Secrecy Act by FinCEN

The Financial Crimes Enforcement Network (FinCEN) is a bureau of the U.S. Department of the Treasury. FinCEN’s mission is to safeguard the financial system from illicit use and combat money laundering to promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities. This enables the bureau to carry out its mission by directly and indirectly regulating the financial activities of individuals, businesses, and entire industries.  The BSA, through its implemented regulations, also empowers FinCEN with broad discretion to target particular businesses, industries, and geographic locations thought to be at risk for money laundering or illicit finance.

Potential Penalties

Under the BSA and its implementing regulations at 31 CFR Chapter X, FinCEN may bring an enforcement action for violations of the reporting, recordkeeping, or other requirements of the BSA. Penalties imposed by FinCEN can range from $50,000 in fines for a pattern of negligent activity that violates the BSA up to $1 million in fines for violations involving international money laundering. This is in addition to any criminal penalties that might be imposed by the Department of Justice for willful violations of the BSA and FinCEN administered regulations. Know that a skilled Bank Secrecy Act compliance lawyer can assist those facing these penalties with aggressive legal representation.

Working with a Bank Secrecy Act Compliance Lawyer

Because the penalties associated with violating the BSA can be detrimental to a bank or other financial entity, it is significant to reach out to a professional Bank Secrecy Act compliance lawyer as soon as you know that you are under investigation. If you require experienced legal assistance with your case, do not hesitate to reach out to a dedicated Bank Secrecy Act compliance lawyer today to schedule your initial consultation.