FinCEN and Fed issue joint proposal on BSA recordkeeping and travel rules

The Financial Crimes Enforcement Network (FinCEN) and the Federal Reserve (Fed) issued a joint proposal on Oct. 23, 2020, to reduce the transaction volume threshold for when financial institutions must collect and retain information on funds transfers and remittances that start or end outside the U.S. The proposal would reduce the threshold from $3,000 to $250 for when financial institutions must comply with the recordkeeping and travel rules under the Bank Secrecy Act (BSA). 

• Recordkeeping rule: The recordkeeping rule is intended to help law enforcement and regulatory agencies detect, investigate and prosecute money laundering by preserving the information trail about persons sending and receiving funds through the funds transfer system.
• Travel rule: The travel rule requires banks and nonbank financial institutions to transmit information on certain funds transfers and transmittals of funds to the receiving bank or nonbank financial institution.

This proposal would amend both the recordkeeping and travel rules. In addition, the proposal also clarifies the definition of “money,” which included convertible virtual currencies (e.g., Bitcoin) that have an equivalent value as currency or act as a substitute for currency but do not have legal status. Comments to this proposal are due by Nov. 26, 2020.

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