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FinCEN and the Federal Reserve Board ("FRB") Seek Lower Threshold for Recordkeeping and Travel Rules

November 4th | 2020



FinCEN and the Federal Reserve Board ("FRB") recently filed a proposal that would significantly lower the dollar-value threshold at which the Bank Secrecy Act ("BSA") requires financial institutions to obtain, retain and transmit information on certain fund transfers and transmittals. The proposal affects two BSA rules:

  1. The ‘‘Recordkeeping Rule’’, which requires banks and nonbank financial institutions to collect and retain information related to funds transfers and transmittals of funds in amounts of $3,000 or more; and

  2. The “Travel Rule” that requires banks and nonbank financial institutions to transmit information on certain funds transfers and transmittals of funds to other banks or nonbank financial institutions participating in the transfer or transmittal.

The proposal involves (a) lowering of threshold from $3,000 to $250 for funds transfers and transmittals of funds by financial institutions that begin or end outside the United States; and (b) application of the Recordkeeping and Travel Rules to CVC and Digital Assets that have legal tender status. The proposal is now open for comments, and the agencies are asking for feedback on many potential scenarios, which may indicate a final rule that differs significantly from what is proposed.

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