At a September 17 conference, Treasury Under Secretary for Terrorism and Financial Intelligence John Hurley called for modernizing the Bank Secrecy Act (BSA) to ensure financial institutions provide only “highly useful” information to the government and to reduce unnecessary burdens on industry. Hurley emphasized that the current system “waste[s] time and resources,” often overwhelms law enforcement with SARs that are not “useful,” and that complexity in the system jeopardizes the reliability of data.

Hurley outlined three core principles for reform: (i) treating law enforcement and national security as the “customers” of the AML/CFT system; (ii) focusing on providing maximally useful information, rather than “overwhelming the system with noise”; and (iii) allocating compliance resources to the most pressing threats.

He stated that Treasury intended to replace “subjective” process assessments with “objective” output measures, and that the best measure of effectiveness was how well reporting proactively served the needs of law enforcement. Hurley pointed to FinCEN’s recent exemptive relief order for customer identification program rules as emblematic of the agency’s pragmatic approach going forward. He also addressed industry concerns about continuing activity reviews and documentation burdens, stating, “[e]very hour spent documenting a non-SAR is an hour not spent protecting Americans, and that trade-off is unacceptable.”

Hurley concluded his remarks by encouraging industry feedback on “objective measures of output” as well as ways to incentivize innovation that improves AML outcomes and affirmed the Treasury’s commitment to work with the industry to reduce these reporting burdens.