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Bank Secrecy Act (BSA)
Definition
The Bank Secrecy Act (BSA) is a U.S. law requiring financial institutions to assist government agencies in detecting and preventing money laundering and other financial crimes.
Explanation
Enacted in 1970, the BSA requires financial institutions to maintain records of cash purchases, file reports of cash transactions exceeding $10,000, and report suspicious activity. It is a cornerstone of U.S. anti-money laundering efforts.
Compliance requirements include appointing a BSA officer, implementing an AML program, conducting independent testing, and providing ongoing training for employees.
Example
A bank files a Currency Transaction Report (CTR) for any cash deposit or withdrawal exceeding $10,000 in a single business day, as required by the BSA.