Naming a beneficiary can often avoid untold problems and complications later.
Bank Secrecy Act
Have you heard of the Bank Secrecy Act but aren’t sure what it is? Bankrate explains.
What is the Bank Secrecy Act?
Passed in 1970, the Bank Secrecy Act (BSA) requires U.S. financial institutions to work cooperatively with the government to prevent money laundering. Also known as the Currency and Foreign Transactions Act, the BSA was designed to keep banking institutions from acting as unknown intermediaries in illegal financial transactions.
The BSA requires financial institutions to report suspicious activity that might signify money laundering, tax evasion, or other criminal activities. Suspicious financial transactions that prompt BSA reporting include customers wiring funds into accounts and immediately asking to redirect the money to another institution, or customers selecting investment products that offer high fees and low returns.
In addition, transactions completed by customers with known criminal background or customers providing erroneous or suspicious information trigger BSA audits. The act also requires 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 external audits, train money-tracking personnel, and ensure senior management receives regular updates on audit reports.
Looking for a higher CD rate? We can help you find the best CD offers out there.
Bank Secrecy Act example
The BSA is enforced by the Financial Crimes Enforcement Network (FinCEN). In January 2017, FinCEN reported that they assessed $184 million in penalties to Western Union Financial Services for past violations of anti-money laundering rules, in a coordinated effort with the Department of Justice and the Federal Trade Commission.
In 2012, HSBC Bank paid $1.9 billion for violations in its failure to prevent money laundering by drug traffickers, and in 2014 JP Morgan paid $2.6 billion in fines for failing to notify authorities about suspicions of fraud at Bernie Madoff’s fund.
More From Bankrate
4 min read May 27, 2022
Knowing bank holiday schedules can help you avoid delays on necessary transactions.4 min read May 26, 2022
Specific savings accounts can help disabled individuals gain financial security.4 min read May 24, 2022
These five banking apps can help you save money even on a tight budget.4 min read May 13, 2022
If your bank or credit union is involved in a merger, here’s what to expect.6 min read May 13, 2022
The short answer is yes, but policies vary from bank to bank.3 min read May 12, 2022
Don’t let past problems prevent you from getting your finances back on track.4 min read May 11, 2022
Here are some of the most common monthly expenses to factor into your budget.7 min read May 11, 2022
Keep fees in check when you shift money from one bank account to another.4 min read May 11, 2022