Federal Regulatory Agencies' Efforts To Ensure Bank Secrecy Act Compliance

GAO discussed how bank regulatory agencies ensure compliance with the Bank Secrecy Act, which requires financial institutions to report currency transactions of more than $10,000. The Department of the Treasury has delegated enforcement authority to seven federal financial regulatory agencies. GAO stated that, generally, the agencies: (1) place greater emphasis on mission-related objectives than on enforcement of the act because they believe their resources are limited; (2) do not have detailed procedures for act-related examinations and apply existing procedures inconsistently; (3) do not sufficiently document examination work, which makes it difficult to assess the adequacy of compliance examinations; and (4) tend to use examiners with lesser levels of experience and training to carry out act-related examinations. GAO also stated that the agencies could: (1) strengthen the examination procedures they use as a model for developing their individual procedures; and (2) better communicate and coordinate their act-related activities with one another to improve the overall compliance effort. GAO noted that Treasury and the agencies are undertaking efforts to improve act-related examinations.