What's Happening?
Recent developments indicate a shift in Washington towards recalibrating the Bank Secrecy Act (BSA) reporting to enhance intelligence value while reducing compliance burdens. On October 9, 2025, the Financial
Crimes Enforcement Network (FinCEN) and federal banking regulators issued joint guidance through Suspicious Activity Report (SAR) FAQs, clarifying expectations that have historically led to defensive filings. Additionally, on October 21, 2025, Senate Banking Committee Chairman Tim Scott introduced the STREAMLINE Act, aiming to simplify BSA reporting. These actions suggest a move towards risk-based efficiency, although the SAR guidance aligns with existing regulations rather than overhauling them.
Why It's Important?
The proposed changes to BSA reporting are significant for financial institutions, as they aim to reduce unnecessary compliance burdens and focus on high-value intelligence. The SAR FAQs clarify that institutions are not required to file SARs for transactions near the $10,000 threshold unless there is suspicion of evasion. This could decrease defensive filings and allow banks to allocate resources more effectively. The STREAMLINE Act, if enacted, could further simplify reporting by raising the currency transaction reporting threshold, aligning with industry calls to adjust for inflation. These changes could lead to more efficient use of compliance resources and better detection of genuinely suspicious activities.
What's Next?
The STREAMLINE Act is in its early stages and will undergo the legislative process, including committee reviews and potential amendments. Financial institutions should monitor these developments closely, as the Act's final form will impact compliance strategies. In the meantime, banks can adjust their policies based on the SAR FAQs to reduce unnecessary filings and focus on risk-based reporting. The ongoing dialogue between Congress and regulatory bodies suggests a continued effort to refine BSA reporting, with potential future adjustments to align with evolving financial crime threats.
