Fed, FinCEN Propose to Lower Reporting Threshold for Funds Transfers

The Federal Reserve and the Financial Crimes Enforcement Network today proposed to reduce the transaction volume threshold for when banks must collect and retain information on funds transfers and remittances that start or end outside of the United States. The proposal would reduce the threshold from $3,000 to $250 for when insured depository institutions must comply with the recordkeeping and travel rules under the Bank Secrecy Act.

The agencies also proposed to clarify that “money,” as defined in recordkeeping and travel rules, includes convertible virtual currencies like bitcoin that have an equivalent value as currency or act as a substitute for currency but do not have legal status.

The agencies said there would be benefits to law enforcement investigations from retaining data associated with more transfers and added that they believe the effects on the financial system of lowering the threshold would be low. The Fed and FinCEN have sought comments—due by Nov. 26—on the extent of the burden on financial institutions.