For the first time in more than five decades, Congress is taking significant steps to update the reporting thresholds under the Bank Secrecy Act (BSA). Lawmakers assert that the existing limits are outdated and impose unnecessary burdens on financial institutions. A new legislative proposal aims to modernize these rules, making compliance easier for banks, credit unions, and cryptocurrency platforms.
Lawmakers Advocate for Streamlined Reporting
A coalition of U.S. senators, led by Senate Banking Committee Chair Tim Scott, has introduced the STREAMLINE Act. This legislation seeks to reform the BSA, which has served as a cornerstone of the U.S. Anti-Money Laundering (AML) framework since its inception in 1970. The BSA mandates that financial institutions report specific transactions to federal authorities in order to combat financial crimes.
The proposed bill aims to raise the reporting thresholds that necessitate Currency Transaction Reports (CTRs) and Suspicious Activity Reports (SARs). Currently, CTRs must be filed for transactions exceeding $10,000, while SARs are required for amounts ranging from $2,000 to $5,000, depending on the level of suspicion involved. Under the new proposal, the CTR threshold would increase to $30,000, and the SAR thresholds would be adjusted to $3,000 and $10,000.
Additionally, the Treasury Department would be mandated to reassess and adjust these thresholds every five years to accommodate inflationary changes.
Reducing Compliance Burdens
Senator Pete Ricketts, a key supporter of the bill, emphasized that the current thresholds are outdated due to inflation over the past 50 years. He stated, “After more than 50 years of inflation, the Bank Secrecy Act’s reporting thresholds are badly outdated. They must be modernized.” Ricketts believes that the new legislation will alleviate unnecessary regulatory pressure on financial institutions while still providing law enforcement with access to critical information.
This reform is particularly pertinent given the rapid expansion of both traditional and digital financial services. Many in the cryptocurrency sector have long expressed concerns that antiquated AML regulations do not align with modern technologies and business models.
Crypto Firms Must Comply
U.S.-based cryptocurrency exchanges, including Coinbase and Kraken, are also subject to the Bank Secrecy Act. The same reporting rules applicable to banks extend to digital asset firms in terms of AML compliance. As the industry matures, crypto companies are advocating for regulatory clarity that accurately reflects the current market dynamics.
In a parallel development, Senate Democrats recently convened with executives from major crypto firms such as Circle, Ripple, Kraken, Coinbase, and Chainlink. The discussions centered on the Senate’s version of the House’s CLARITY Act, aimed at establishing a clear federal regulatory framework for digital assets.
According to reports from attendees, the senators involved expressed their commitment to advancing a bill that addresses the market structure for digital assets.
Broader Initiatives for Financial Data Rules and Open Banking
In a related initiative, several fintech and cryptocurrency trade associations sent a letter to the Consumer Financial Protection Bureau (CFPB) urging it to finalize an open banking rule that empowers consumers with full control over their financial data. Open banking facilitates secure sharing of financial information with third-party applications via APIs, bridging traditional finance and emerging platforms in areas such as decentralized finance (DeFi), crypto payments, and digital wallets.
The trade groups assert that establishing clear rules around data ownership is crucial for fostering growth and innovation within the financial services sector.
