Investor's wiki

Bank Secrecy Act (BSA)

Bank Secrecy Act (BSA)

What is the Bank Secrecy Act?

Passed in 1970, the Bank Secrecy Act (BSA) requires U.S. financial institutions to work agreeably with the government to forestall money laundering. Otherwise called the Currency and Foreign Transactions Act, the BSA was intended to keep banking institutions from acting as obscure go-betweens in illegal financial transactions.

More profound definition

The BSA requires financial institutions to report suspicious activity that could imply money laundering, tax evasion, or other crimes. Suspicious financial transactions that brief BSA reporting incorporate customers wiring funds into accounts and quickly requesting to divert the money to another institution, or customers choosing investment products that offer high fees and low returns.
Furthermore, transactions completed by customers with known criminal foundation or customers giving erroneous or suspicious information trigger BSA audits. The act likewise expects banks to keep records on transfers or cash purchases valued at more than $10,000 (daily aggregate amount) of letters of credit, promissory notes, or foreign currency transfers.
The BSA requires financial institutions to formulate compliance programs, practice internal and outer audits, train money-following personnel, and guarantee senior management receives standard updates on review reports.

Bank Secrecy Act model

The BSA is implemented by the Financial Crimes Enforcement Network (FinCEN). In January 2017, FinCEN reported that they assessed $184 million in punishments to Western Union Financial Services for past infringement of anti-money laundering rules, in a planned exertion with the Department of Justice and the Federal Trade Commission.
In 2012, HSBC Bank paid $1.9 billion for infringement in its inability to forestall money laundering by drug dealers, and in 2014 JP Morgan paid $2.6 billion in fines for neglecting to advise specialists about doubts of fraud at Bernie Madoff's fund.


  • The Bank Secrecy Act (BSA) is U.S. legislation pointed toward keeping crooks from utilizing financial institutions to stow away or launder money.
  • The law requires financial institutions to give documentation to regulators at whatever point their clients deal with suspicious cash transactions including aggregates more than $10,000.
  • The law doesn't need documentation for each transaction more than $10,000, yet organizations must file Internal Revenue Service (IRS) Form 8300 assuming that they receive more than $10,000 in cash from one buyer.


Which banks have filed suspicious activity reports most frequently?

A couple of large banks โ€” Deutsche Bank, Bank of New York Mellon, Standard Chartered Bank, JPMorgan Chase, Barclays, and HSBC Bank โ€” together filed over 85% of all SARs.

What is a suspicious activity report?

At the point when a bank notices an apparently suspect transaction โ€” for instance, something that could point to corruption or money laundering โ€” the institution will file a suspicious activity report (SAR), a document utilized by financial institutions to report the activity to U.S. authorities.An SAR isn't an allegation. It's a method for alerting government regulators and law enforcement to unpredictable activity and conceivable crime.

Does a customer has at least some idea when a suspicious activity report is filed?

No. Suspicious activity reports are confidential. Federal law prohibits the notice of any person who is engaged with the activity being reported on a SAR. The individual who is the subject of the SAR won't know that the activity has been reported.Legal actions, for example, summons or court orders might require guidance from FinCEN (Financial Crimes Enforcement Network) to know how to continue. Government agencies might mediate to safeguard the organization that filed the report and to keep the integrity of the data in the SAR database.