Bank Regulation in The United States - Anti-money Laundering and Anti-terrorism

Anti-money Laundering and Anti-terrorism

Further information: Bank Secrecy Act, USA PATRIOT Act, and Office of Foreign Assets Control

The Bank Secrecy Act (BSA) requires financial institutions to assist government agencies to detect and prevent money laundering. Specifically, the act requires financial institutions to keep records of cash purchases of negotiable instruments, file reports of cash transactions exceeding $10,000 (daily aggregate amount), and to report suspicious activity that might signify money laundering, tax evasion or other criminal activities.

Section 326 of the USA PATRIOT Act allows financial institutions to place limits on new accounts until the account holder's identity has been verified.

Office of Foreign Assets Control (OFAC) sanctions apply to all U.S. entities including banks. The FFIEC provides guidelines to financial regulators for verifying compliance with the sanctions.