‘Let It Be?’
When you speak with Texas community bankers, especially those closest to the border, BSA/AML issues are frequently atop the list of concerns. A particular sticking point is the Currency Transaction Report threshold of $10,000.
The current threshold was set when the Bank Secrecy Act was first passed in 1970. The salary of the average American was $7,800 at that time. An automobile fresh off the assembly line in Detroit cost about $4,000. And The Beatles were on the charts with the song “Let It Be.”
However, “Let It Be” was taken very literally by folks in Washington who have kept the CTR threshold at $10,000 for almost 50 years! Things have changed a lot since 1970. When adjusted for the Consumer Price Index, the CTR threshold should now be approaching $70,000.
Are government agency budgets and personnel still driven by 50-year numbers?
The banking community has demonstrated for decades that it is a committed BSA/AML partner to our regulators and law enforcement by investing millions in technology and people to comply and support these activities.
But layer upon layer of compliance costs impact the ability of banks to meet their primary mission. With every passing year, the antiquated CTR threshold adds to the cost of community banks, which are mostly small businesses not investigative agencies.
To be clear, banks will continue to be committed partners in combatting illicit activity. But the time has come for our public sector partners to recognize that a partnership is effective only if the partners on both sides are responsive to the needs of the other.
BSA/AML reform legislation has been proposed in both the U.S. House and Senate. Unfortunately, provisions to change the CTR threshold are not included. Even a modest adjustment of the CTR threshold — to $20,000 or $30,000 — would constitute significant relief for many community bank partners.
When it comes to this issue, TBA won’t just “Let It Be.” We will continue to advocate for the modernization of this antiquated threshold along with other BSA/AML reforms.