GAO lists 4 recommendations for improving communications about BSA/AML reporting

Four recommendations – including for regular feedback – on improving communications about how anti-money laundering (AML) devices such as suspicious activity reports (SARs) are used by federal regulators were made by the congressional watchdog in a report issued Thursday.

The Government Accountability Office (GAO) said that metrics for gauging the use of the SARs exist (such as how many reports produced investigations), but those metrics are not consistently communicated to the financial institutions that file the reports.

The agency said it conducted the study because financial institutions have complained that generating the reports “can be labor intensive” and that the institutions want more feedback on whether the reports submitted are useful.

The recommendations made by GAO are largely directed at Treasury’s Financial Crimes Enforcement Network (FinCEN), the law enforcement agency responsible for administering Bank Secrecy Act (BSA) and AML requirements; regulators hold examination responsibility.

GAO’s recommendations to FinCEN are:

  • Review options for establishing a mechanism through which law enforcement agencies may provide regular and institution-specific feedback on BSA reporting. Options should take into consideration providing such feedback to cover different types of financial institutions and those with significant financial activity. The review could either be part of FinCEN’s BSA value study or through another method.
  • Review options to more consistently and publicly provide summary data on the usefulness of BSA reporting. This review could either be concurrent with FinCEN’s BSA value study or through another method.
  • Consider prioritizing the inclusion of the primary self-regulatory organization (SRO, such as the Financial Industry Regulatory Authority [FINRA], a non-governmental agency) that conducts BSA examinations in the futures industry in the Bank Secrecy Act Advisory Group (BSAAG) on a more consistent basis; and making the primary futures industry association a concurrent member.
  • Take steps to explore providing direct BSA data access to the National Futures Association.

Bank Secrecy Act: Agencies and Financial Institutions Share Information but Metrics and Feedback Not Regularly Provided