ABA Urges Withdrawal of Proposed Rule Lowering Reporting Threshold for Funds Transfers

The American Bankers Association urged the Federal Reserve and the Financial Crimes Enforcement Network today to withdraw a proposed rule that would reduce the transaction threshold from $3,000 to $250 for when banks must collect and retain information on funds transfers and remittances that start or end outside of the United States.

ABA urged the agencies to consider the potential burden and costs that the reduced threshold would impose on institutions that offer wire transfers, and whether the threshold change would ultimately be beneficial to law enforcement. The association further pointed out that while the proposal is based on public comment, that feedback was gathered in 2006, and the “technological and industry changes that have occurred in the intervening 14 years call into question the appropriateness of that foundation.”

The proposed rule would also clarify that “money,” as defined in the 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. ABA said that while that change appears innocuous “this is a rapidly changing area. The potential for unintended consequences is significant, particularly since the proposed change does not appear to take into consideration changes by other regulatory agencies or state legislatures.”