FinCEN notes desire to streamline BSA processes

June 25, 2007—The Financial Crimes Enforcement Network summarized a four-point plan Friday for how it is working to make Bank Secrecy Act regulations easier to use and better align penalties for noncompliance to actual risk.

The plan does not address the frequency and transaction threshold for the filing of currency transaction reports, nor does it address any change in current requirements on the filing of suspicious activity reports. Rather, FinCEN, as summarized in the plan released Friday on its Web site, is aiming to:

• make risk-based reporting requirements more clear;
  
  
• narrow the definition of money services businesses (which are not eligible for the exempt entity status available under current CTR rules), eliminating from the definition those whose services pose “little to no opportunity” for money laundering;
  
  
• begin its own chapter of the Code of Federal Regulations that provides one general part plus separate, specific parts for each covered industry; and
  
  
• provide more feedback to affected industries showing how new rules or rule changes are working, within 18 months of their effective dates.

FinCEN Director Jim Freis invited industry trade representatives, including NAFCU President Fred Becker, for a meeting prior to the release of this information Friday. In that meeting, Freis and Treasury Secretary Henry Paulson sought to assure the representatives that the agencies are intent on streamlining BSA compliance processes and that they recognize the financial industry is working to do its part to thwart money laundering and terrorism financing.

Becker, reiterating NAFCU’s ongoing interest in other measures—for example, updating the CTR reporting threshold and better guidance on exemptions—said he appreciated Treasury’s effort to reach out as well as the “robust nature” of the data being collected. “FinCEN’s plan is a good start, but it just touches on reducing the regulatory burden for credit unions,” said Becker. “We need to see more regulatory relief here and in other areas.”