Fed, Fincen look to require banks to hold more data on transfers

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WASHINGTON — The Federal Reserve and Financial Crimes Enforcement Network on Friday proposed requiring financial institutions to keep more records on hand related to smaller-value international fund transfers.

The current recordkeeping and travel regulations of the Bank Secrecy Act mandate that banks collect, retain and transmit information on fund transfers of more than $3,000 occurring outside the U.S. But the Fed and Fincen are proposing to change that threshold to $250, noting the information would be helpful in combatting illegal activity.

“Information available to the Agencies indicates that malign actors are using smaller-value cross-border wire transfers to facilitate or commit terrorist financing, narcotics trafficking, and other illicit activity, and that increased recordkeeping and reporting concerning these transactions would be valuable to law enforcement and national security authorities,” the agencies said in their joint proposal.

Under the Recordkeeping Rule of the Bank Secrecy Act, originating banks are required to collect and maintain the name and address of the person sending funds, the amount and date of the transfer, any payment instructions from the person initiating the transfer and the recipient’s bank.

The Federal Reserve and Financial Crimes Enforcement Network on Friday proposed requiring financial institutions to keep more records on hand related to smaller-value international fund transfers.
The Federal Reserve and Financial Crimes Enforcement Network on Friday proposed requiring financial institutions to keep more records on hand related to smaller-value international fund transfers.

Despite the proposed lower threshold, the Fed and Fincen said that they do not believe it would increase the burden on financial institutions or impact the cost and efficiency of the payments system.

“Some financial institutions are already collecting information on at least a portion of transactions taking place under the current threshold for purposes of reporting suspicious transactions to FinCEN,” the proposal said, adding that some banks also already maintain information on smaller transactions because it’s more cost-effective to have a single data collection process in place.

The proposal also would apply the same standards to transactions using digital currencies.

The public can comment on the proposal for 30 days after it is published in the Federal Register.

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AML FinCEN Federal Reserve Money transfers Financial crimes Cross border payments Payments
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