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FinCEN, Federal Reserve Board propose amendments to Bank Secrecy Action definitions

The Financial Crimes Enforcement Network, a division of the U.S. Treasury, and the Federal Reserve Board are seeking public comment on a proposal for several definitions of the Bank Secrecy Act.

In a notice of proposed rule-making issued jointly by the agencies last week, FinCEN and the Fed said that amending the definitions of “fund transfer” and “transmittal of funds” under the BSA is “necessary to maintain the current scope of fund transfers and transmittals subject to the BSA in light of amendments to the Electronic Funds Transfer Act made by the [2010 Dodd-Frank Act].”

Amendments to the EFTA and recently finalized amendments to Regulation E, which implements the EFTA, take effect on Feb. 7 and will result in an increased number of transactions subject to the EFTA’s remittance regulations.

FinCEN and the Fed said that certain transactions covered under the EFTA’s remittance regulations, including international funds transfers sent by consumers through money transmitting firms, will not be covered under the BSA’s current funds definitions. The BSA, which includes record-keeping and travel rules, was designed to assist the government in detection and prevent of money laundering and other illicit financial activities.

To avoid the discrepancy, the Fed Board and FinCEN have proposed an amendment to the BSA’s definitions to limit the exclusion of EFTA-covered transactions from travel and record-keeping rules.

Comments on the measure are due on or before Jan. 25.

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