U.S. Department of the Treasury outlines outcomes-based reform agenda for Bank Secrecy Act compliance and examinations

In remarks to the Association of Certified Anti-Money Laundering Specialists, Under Secretary for Terrorism and Financial Intelligence John K. Hurley set out the U.S. Department of the Treasury’s approach to modernising the Bank Secrecy Act (BSA) anti-money laundering and countering the financing of terrorism (AML/CFT) framework, focusing on reducing low-value reporting and improving the usefulness of information for law enforcement and national security. A core plank is reforming the examination system by moving away from subjective assessments of process and toward objective measures of program outputs and effectiveness. Hurley pointed to rising volumes of “not so useful” Suspicious Activity Reports (SARs) and increasing complexity, and called for better mechanisms for communication and feedback on what reporting is valuable. He framed well-governed technology as a “force multiplier” and highlighted a recent Financial Crimes Enforcement Network (FinCEN) exemptive order under the customer identification program rule that permits banks to obtain a taxpayer identification number from a third-party source rather than directly from the customer, while signalling support for broader innovation including AI, blockchain analysis, digital identity and APIs. The remarks also flagged specific burden points Treasury is looking to address, including continuing activity reviews, expectations around documenting decisions not to file a SAR, and the costs of repeated structuring-related reporting on customers known to be legitimate that can contribute to debanking. Treasury is working on changes related to continuing activity reviews and expects to provide further updates, and invited industry input on objective performance indicators and how to align incentives so that compliance efficiencies translate into better information and outcomes for law enforcement users.