Bank Secrecy Act (BSA)

Compliance with the BSA is mandatory for a wide range of financial and financial-adjacent institutions in the U.S., including:

• Banks and credit unions
• Money service businesses (MSBs) – such as money transmitters, check cashers, and prepaid card issuers
• Broker-dealers in securities
• Casinos and card clubs
• Insurance companies (certain products)
• Loan and mortgage companies
• Fintech firms and crypto exchanges (increasingly under scrutiny)

These entities must register with FinCEN (Financial Crimes Enforcement Network) and implement robust AML programs.

BSA compliance refers to meeting the regulatory requirements set forth by the Bank Secrecy Act, while AML compliance is the broader framework of policies and procedures that detect and report suspicious financial activities.

Together, BSA/AML compliance includes:

• Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD)
• Suspicious Activity Reports (SARs)
• Currency Transaction Reports (CTRs) for cash transactions over $10,000
• Recordkeeping and transaction monitoring
• Internal controls, independent audits, and employee training

These practices help institutions spot signs of illegal activity like money laundering, fraud, or sanctions evasion.

The BSA Officer (also called a Compliance Officer) is the designated individual responsible for ensuring an institution’s compliance with BSA/AML requirements. Their core responsibilities include:

• Designing and implementing the institution’s BSA/AML compliance program
• Overseeing transaction monitoring systems and investigations
• Reviewing and filing SARs and CTRs
• Ensuring employee training on AML regulations
• Acting as the main point of contact with regulatory bodies like FinCEN or OCC
• Conducting regular risk assessments and internal audits

A competent BSA Officer helps a company avoid fines, prevent reputational damage, and stay compliant with federal law.