The Bank Secrecy Act was enacted on October 26, 1970, when President Richard Nixon signed Public Law 91-508 into law. Formally titled the Currency and Foreign Transactions Reporting Act, it was the first federal statute aimed squarely at money laundering, and it required financial institutions to create paper trails that investigators could follow when tracking illicit money.1FinCEN. The Bank Secrecy Act The core provisions live at 31 U.S.C. 5311–5314 and 5316–5336.
Why Congress Passed It in 1970
Through the late 1960s, congressional hearings kept surfacing the same problem: organized crime, drug traffickers, and tax evaders were moving enormous sums of cash through U.S. banks and into offshore accounts, and nothing in existing law required the banks to write any of it down. Secret foreign accounts were effectively invisible to federal tax authorities and law enforcement.1FinCEN. The Bank Secrecy Act
Lawmakers wanted a single federal standard covering every financial institution, replacing a patchwork of state rules that criminals easily worked around. The bill moved through Congress as a direct answer to those documented gaps, and Nixon signed it into law on October 26, 1970.
Is It Still the Same Law?
The statute Nixon signed was a starting point. Two later laws reshaped it into the anti-money-laundering framework banks operate under today, so the 1970 date marks the beginning of the BSA rather than the shape of what “the BSA” now means.
The USA PATRIOT Act (2001)
After the September 11 attacks, Title III of the USA PATRIOT Act sharply expanded the BSA. Banks were required to verify the identity of every person opening an account through a Customer Identification Program.2Congress.gov. H.R.3162 – Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism The law also opened new information-sharing channels between law enforcement and financial institutions, imposed enhanced due diligence on foreign correspondent and private banking accounts, and gave Treasury authority to impose “special measures” against jurisdictions or institutions flagged as money laundering concerns.
The Anti-Money Laundering Act (2020)
Enacted as part of the National Defense Authorization Act for fiscal year 2021, the Anti-Money Laundering Act (AMLA) was the biggest BSA overhaul in nearly twenty years. It formally added national security and financial system integrity to the law’s stated purposes, and it clarified that businesses dealing in “value that substitutes for currency” — which brings cryptocurrency exchanges under the BSA — are covered institutions.3Congress.gov. Anti-Money Laundering Act of 2020 Implementation and Beyond AMLA also created a whistleblower program paying 10 to 30 percent of monetary sanctions when enforcement actions exceed $1 million, authorized additional civil penalties for repeat violators, and barred certain BSA offenders from serving on the boards of U.S. financial institutions.
AMLA included the Corporate Transparency Act, which originally required most domestic companies to report their beneficial owners to FinCEN. An interim final rule published in March 2025 exempted all entities created in the United States from that requirement. Only foreign entities registered to do business in a U.S. state or tribal jurisdiction currently have to file beneficial ownership reports.4FinCEN.gov. Frequently Asked Questions
What the BSA Requires Today
The reporting rules are what most people actually encounter, either as a customer being asked for extra information at the teller window or as a compliance officer filing federal forms. Every report goes to the Financial Crimes Enforcement Network (FinCEN), the Treasury bureau that administers the BSA. The law also reaches well beyond banks: broker-dealers, insurance companies, casinos above a gaming-revenue threshold, money transmitters, currency exchanges, pawnbrokers, dealers in precious metals and jewels, and cryptocurrency exchanges all fall within the statute’s definition of “financial institution.”5Office of the Law Revision Counsel. 31 U.S. Code 5312 – Definitions and Application of this Subchapter
Currency Transaction Reports
When a customer conducts a cash transaction of more than $10,000 in a single business day, the financial institution must file a Currency Transaction Report (CTR) with FinCEN.6FinCEN.gov. Fact Sheet for the Industry on MSB Suspicious Activity Reporting Rule Multiple cash transactions that together exceed $10,000 in one day trigger the same filing. The bank handles it. A CTR is paperwork, not an accusation.
Suspicious Activity Reports
Suspicious Activity Reports (SARs) have no single dollar trigger. A bank files a SAR when it detects activity that could involve criminal proceeds, appears designed to evade BSA rules, or has no apparent legitimate purpose. The filing threshold is generally $5,000 for banks and $2,000 for money services businesses. Institutions have 30 calendar days from initial detection to file, extendable to 60 days if no suspect has been identified.7Financial Crimes Enforcement Network. Suspicious Activity Reporting Requirements8Financial Crimes Enforcement Network. FinCEN Suspicious Activity Report Electronic Filing Instructions
Foreign Account Reporting
Any U.S. person whose foreign financial accounts collectively exceed $10,000 at any point during the calendar year must file a Report of Foreign Bank and Financial Accounts (FBAR) with FinCEN. This applies to individuals, corporations, partnerships, trusts, and estates. The FBAR is filed electronically on FinCEN Form 114, with an April 15 deadline and an automatic extension to October 15.9Internal Revenue Service. Report of Foreign Bank and Financial Accounts (FBAR)
The Structuring Trap
Federal law makes it a crime to break up transactions to keep them under the $10,000 CTR threshold. This is called structuring, and it’s where ordinary people most often stumble into BSA trouble. Depositing $9,500 today and $9,500 tomorrow because someone suggested it “avoids government scrutiny” is a federal offense, even when the money itself is entirely legitimate.10Office of the Law Revision Counsel. 31 U.S. Code 5324 – Structuring Transactions to Evade Reporting Requirement Prohibited
The statute does not require the underlying money to be dirty. The crime is the act of shaping transactions to dodge the reporting rule. Civil penalties can equal the full amount of currency involved, and the government can pursue civil forfeiture of those funds on top of that.11Internal Revenue Service. 4.26.7 Bank Secrecy Act Penalties If you have a legitimate reason to deposit a large amount of cash, deposit it in one transaction and let the CTR happen.
What Violations Cost
BSA penalties come in criminal and civil tracks, and they can run at the same time. A willful violation of a reporting or recordkeeping requirement carries a fine of up to $250,000 and up to five years in federal prison. If the violation is part of a pattern involving more than $100,000 in a 12-month period, or occurs alongside another federal violation, the maximum fine doubles to $500,000 and the prison term to ten years.12Office of the Law Revision Counsel. 31 U.S. Code 5322 – Criminal Penalties Since AMLA, courts can also order forfeiture of profits from the violation, and officers or employees of financial institutions can be required to repay bonuses received during the year of the violation or the year after.
On the civil side, negligent violations run up to $500 each, or up to $50,000 for a pattern of negligent noncompliance. Willful violations reach the greater of $100,000 or the transaction amount, with a $25,000 floor. Willful FBAR violations reach the greater of $100,000 or 50 percent of the account balance at the time of the violation.13Office of the Law Revision Counsel. 31 U.S. Code 5321 – Civil Penalties11Internal Revenue Service. 4.26.7 Bank Secrecy Act Penalties All of these civil figures are subject to annual inflation adjustments, so the amount actually assessed in a given case can exceed the base statutory number.