Banking Secrecy Act (BSA)

What Is Banking Secrecy Act (BSA)?

The Banking Secrecy Act (BSA) is a federal law that requires financial institutions to maintain records and file reports on certain transactions. The purpose of the BSA is to help detect, deter, and prevent money laundering activities by providing information about suspicious activity or large cash deposits. Financial institutions must report any transaction over $10,000 in cash as well as other types of suspicious activity such as structuring multiple smaller deposits to avoid reporting requirements.

The BSA also requires banks to establish customer identification programs which require customers to provide proof of identity when opening an account or conducting certain transactions. Banks are required to keep records for five years after the date of each transaction and make them available upon request from government agencies such as the Internal Revenue Service (IRS). Additionally, banks must have procedures in place for monitoring their customers’ accounts for unusual activity that could indicate money laundering or terrorist financing activities.

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