Bank Secrecy Act (BSA) & Related Regulations

The OCC's implementing regulations are found at 12 CFR 21.11 and 12 CFR 21.21. The BSA was amended to incorporate the provisions of the USA PATRIOT Act which requires every bank to adopt a customer identification program as part of its BSA compliance program.

BSA and Related Statutes

• Bank Secrecy Act - 31 USC 5311 - 5330
• Foreign Assets Control Regulations (OFAC) 31 CFR 500
• Financial Record Keeping and Reporting of Currency and Foreign Transactions - 31 CFR 1010.310
• USA PATRIOT Act

Procedures for Monitoring BSA Compliance - 12 CFR 21.21

This regulation requires every national bank and savings association to have a written, board approved program that is reasonably designed to assure and monitor compliance with the BSA. The program must, at a minimum:

1. provide for a system of internal controls to assure ongoing compliance;
2. provide for independent testing for compliance;
3. designate an individual responsible for coordinating and monitoring day-to-day compliance; and
4. provide training for appropriate personnel. In addition, the implementing regulation for section 326 of the PATRIOT Act requires that every bank adopt a customer identification program as part of its BSA compliance program.

Reports of Suspicious Activities - 12 CFR 21.11 and 12 CFR 163.180

This regulation requires every national bank to file a Suspicious Activity Report (SAR) when they detect certain known or suspected violations of federal law or suspicious transactions related to a money laundering activity or a violation of the BSA. A SAR filing is required for any potential crimes:

1. involving insider abuse regardless of the dollar amount;
2. where there is an identifiable suspect and the transaction involves $5,000 or more; and
3. where there is no identifiable suspect and the transaction involves $25,000 or more. A SAR filing also is required in the case of suspicious activity that is indicative of potential money laundering or BSA violations and the transaction involves $5,000 or more.

Institutions of Primary Laundering Concerns

Section 5318A of the Bank Secrecy Act, as added by section 311 of the USA PATRIOT Act, authorizes the Secretary of the Treasury to designate a foreign jurisdiction, institution, class of transaction, or type of account as being of "primary money-laundering concern," and to impose one or more of five "special measures."

BSA Reporting Requirements

BSA-related reporting requirements for national banks and savings associations are administered by the US Department of Treasury's Financial Crimes Enforcement Network (FinCEN). Financial institutions must file reports electronically through the BSA E-Filing System.

• Currency Transaction Report (CTR)
• Report of International Transportation of Currency or Monetary Instruments (CMIR)
• Report of Foreign Bank and Financial Accounts (FBAR)
• Suspicious Activity Report (SAR)
• Designation of Exempt Person Form

The following FinCEN publications provide additional guidance and information to bankers:

• Frequently Asked Questions Regarding the FinCEN Currency Transaction Report (CTR)
• Frequently Asked Questions Regarding the FinCEN Suspicious Activity Report (SAR)
• SAR Activity Review - By the numbers
• SAR Activity Review, Trends, Tips and Issues