WASHINGTON—Deputy Treasury Secretary Michael Faulkender stated the department is examining ways to simplify the filing of suspicious activity and currency transaction reports, part of a larger push to modernize enforcement of the Bank Secrecy Act.
Speaking last week at the 62nd Bank Secrecy Act Advisory Group plenary meeting, Faulkender said a “reinvigorated” BSA system must recognize the differences in financial institution size, complexity and risk.
“An approach that we may deem necessary for a large institution with an expansive risk profile may be unnecessarily burdensome for a smaller one with a more limited risk profile,” he said.
“We recognize that there is an urgent need to modernize the implementation of the AML/CFT regime in the United States so that it is effective, risk-based, and focused on the greatest threats to financial institutions and national security,” Faulkender said. “To that end, I have directed my team to work with financial regulators and other stakeholders to move expeditiously to make progress on our modernization efforts. BSAAG members will be a critical part of this effort, and we value your feedback and input to this process.”
As part of the BSA modernization efforts, Faulkender said Treasury is working to change the AML/CFT status quo so that the framework “focuses on our national security priorities and highest risk areas and explicitly permits financial institutions to de-prioritize lower risks. In line with the AML Act’s directive, this includes an acknowledgement that financial institutions must be permitted to direct more attention and resources toward higher-risk customers and activities, consistent with an institution’s risk profile, rather than toward lower-risk customers and activities.”