Money Laundering

The Bank Secrecy Act of 1970 requires financial institutions to maintain records for criminal, tax, or regulatory proceedings, including investigations of money laundering. GAO reviewed whether additional recordkeeping requirements, such as making copies of cashier's checks retrievable by customer information, should be imposed on financial institutions issuing cashier's checks. This report identifies current recordkeeping requirements. Federal regulators, financial industry and advisory groups, and federal law enforcement officials with whom GAO spoke or had expressed their views in published documents agreed that current recordkeeping requirements for cashier's checks--together with the renewed emphasis being placed on the development of effective know-your- customer programs and suspicious-transaction reporting requirements--are sufficient for assisting law enforcement officials combat the use of cashier's checks and other monetary instruments to launder money.

GAO found that the Bank Secrecy Act (BSA) requires financial institutions issuing or exchanging cashier's checks to: (1) file a currency transaction report for financial transactions over $10,000; (2) capture and retain purchaser information for transactions between $3,000 to $10,000; (3) retain copies of cashier's checks for amounts over $100; and (4) maintain a record of certain check transactions exceeding $100. In addition, GAO found that federal government and financial industry officials believe that the current recordkeeping and reporting requirements are sufficient, and imposing additional requirements would not add to the effectiveness of the current BSA recordkeeping requirements.