November 30, 2018

NAFCU BSA relief requests acknowledged at hearing

Blanco at BSA hearing
FinCEN Director Kenneth Blanco testifies before the Senate Banking Committee on BSA issues.

Senate Banking Committee Chairman Mike Crapo, R-Idaho, acknowledged and submitted into the record NAFCU's letter asking the committee to support efforts to provide credit unions with some regulatory relief under the Bank Secrecy Act (BSA) during Thursday's hearing on the issue.

NAFCU Vice President of Legislative Affairs Brad Thaler sent the letter ahead of the hearing and urged the committee to consider two bills introduced in the House – the Financial Reporting Threshold Modernization Act and the Counter Terrorism and Illicit Finance Act – that NAFCU is supportive of in order to provide credit unions with some relief. Thaler also highlighted provisions of S. 2155 that will impact credit unions' BSA requirements.

FinCEN Director Kenneth Blanco, whom NAFCU met with in April, testified Thursday along with officials from the FBI and Office of the Comptroller of the Currency.

During the hearing, lawmakers and witnesses discussed a number of credit union-related issues, including filing thresholds for currency transaction reports (CTRs) and suspicious activity reports (SARs), guidance for marijuana banking, beneficial ownership requirements and BSA examinations.

Senate Banking Subcommittee Chairman Pat Toomey, R-Penn., noted that CTR and SAR thresholds have not been increased, not even to keep up with inflation, and that the amount of data reported has increased significantly as a result.

Blanco indicated that FinCEN is working to find the "sweet spot" to ensure financial institutions are using resources to efficiently collect needed information. NAFCU is supportive of efforts to increase thresholds, such as through the legislation Thaler wrote in support of, because of the relief it would provide credit unions.

Committee member Robert Menendez, D-N.J., flagged risks in the legalized marijuana industry as many businesses operate mainly with cash. Blanco said financial institutions interested in serving marijuana-related businesses should follow guidelines the agency released in 2014. NAFCU has resources available on its Compliance Blog and has explored the issue in its monthly Compliance Monitor newsletter and bimonthly magazine to help credit unions understand the compliance risk of serving marijuana businesses. The association is also monitoring legislation in Congress that could provide clarity on the issue.

Related to other issues discussed during the hearing, a recent NAFCU Compliance Blog post outlines what regulators look for when reviewing credit unions' BSA/anti-money laundering (AML) programs during examinations. Another NAFCU Compliance Blog provides credit unions with a refresher on Office of Foreign Assets Control (OFAC) requirements and how they impact compliance with the BSA's customer due diligence rule and beneficial ownership provisions.