After circulating a discussion draft for several months, the Senate introduced its version of a Bank Secrecy Act bill with the ILLICIT CASH Act (S. 2563) on September 26, 2019.
Congressional efforts to update the Bank Secrecy Act could help nonprofit organizations (NPOs) that face increasingly urgent problems with transferring funds across borders. The Senate version contains preambulatory language addressing the need to enable money flows overseas for humanitarian aid. It cites data from our 2017 study of Financial Access of U.S. Nonprofits and emphasizes the risk-based approach to regulation that Charity & Security Network and its allies have recommended.
A March 4, 2020 letter to senators expresses support for provisions on derisking and makes recommendations to strengthen them. In particular, the letter urges the bill to require federal annual training for bank examiners, to require Treasury to submit a strategy on reducing derisking and its adverse consequences, and incorporate the concept of effectiveness into the bank examination process. (A related bill has passed the House of Representatives.)
The letter concludes by stating, “In updating the BSA, we encourage the Senators to take a comprehensive approach that establishes a framework based on a proportionate, risk-based approach that facilitates use of transparent and regulated financial channels while minimizing the risk of derisking.”