House Committee Holds Hearing on Updating Bank Secrecy Act Reporting Rules

U.S. House Committee on Financial Services held a hearing this week on modernizing the Bank Secrecy Act. Federal regulators recently issued a joint notice of proposed rulemaking to update BSA program requirements for the financial institutions they supervise.

The Bank Secrecy Act requires banks to file Suspicious Activity Reports when they detect possible illicit activity and Currency Transaction Reports for transactions near or above $10,000. Neither threshold has been adjusted for inflation since the law was enacted in 1970.

7 million reports under the BSA in fiscal year 2025, or roughly 78,000 reports per day. According to Nicholas Anthony at the Cato Institute, these filings produced only about 275 IRS criminal investigations.

The BSA was originally created to address tax evasion concerns involving foreign bank accounts. Banks must now decide whether to file reports or close accounts when they fear penalties for incomplete filings. This approach has led institutions to report or close accounts they would otherwise maintain.

The law gives banks law enforcement responsibilities while providing vague guidance and the prospect of large fines.

Senate banking committee Chairman Tim Scott’s proposed STREAMLINE Act would raise the outdated reporting thresholds. Additional reforms would direct compliance resources toward high-risk activity and require law enforcement to give banks specific feedback on their reports.

Congress and federal agencies are considering changes that would reduce unnecessary filings while preserving the law’s ability to identify actual threats. The goal is to update the system for current financial practices without removing tools used to detect illicit financing.