Subcommittee Chairman of the House Financial Services Committee, Congressman Warren Davidson, recently commented on money laundering and the Bank Secrecy Act (see full press release: https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=411141), and suggested increasing the reporting requirements regarding SARs and CTRs.  The Congressman’s comments called for modernizing the AML regime by reducing unnecessary reporting burdens.

While I agree that there is much room for the AML system to be improved, I disagree with raising the reporting requirements.  In a letter that I wrote to Congressman Davidson, I respectfully outlined my opinion.

Dear Representative Davidson,

I am writing to you in reference to your positions on modernizing the anti-money laundering framework as discussed in your subcommittee hearing on Illicit Finance and International Financial Institutions.  In particular, the issue of modernizing the architecture of the Bank Secrecy Act (BSA).

The proposed changes to the Bank Secrecy Act (BSA) presented in your subcommittee hearing focused solely on Anti-Money Laundering (AML) from the financial institutions perspective. I would like to offer a law enforcement perspective that draws from my experience as a New York State Police Investigator conducting Money Laundering Investigations on a national task force. It is crucial to clarify a significant qualifier that was omitted from your statement regarding Suspicious Activity Reports (SARs): SARs are only required for transactions over $5,000 that the financial institution deems suspicious. The points that I would like to shed a law enforcement’s perspective light on are: 1) increasing the reporting thresholds for SARs and CTRs, 2) the usefulness of those reports, and 3) the effects of inflation and technology on AML.

The Bank Secrecy Act (BSA) was established to equip law enforcement with essential financial intelligence to trace the flow of illicit funds back to their predicate crimes. It is important to recognize that financial institutions are not crime-solving entities; rather, the BSA institutes guidelines for financial institutions to report on critical leads necessary for law enforcement investigations of major offenses such as human trafficking, narcotics, and terrorism. Increasing the reporting thresholds for Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs) would directly undermine this mission, and I must respectfully object to such a proposal for the following reasons.

The BSA was created specifically to aid law enforcement. The administrative burden placed on financial institutions, while a valid concern for review, should not be addressed at the expense of investigative efficacy. Prioritizing institutional convenience over the primary objective of the Act undermines the very foundation of our anti-money laundering efforts.

You cited a Government Accountability Office (GAO) report suggesting that a majority of CTRs are not utilized. This perspective is limited, as statistics often fail to capture the long-term utility of these reports, sometimes spanning years. While each individual CTR may not trigger an immediate review, CTRs frequently serve as a critical link during later stages of an investigation or across unrelated cases. The GAO report does not account for leads developed through the aggregation of multiple reports over time from various financial institutions—such as identifying a common address across disparate subjects. Raising the minimum reporting requirements might reduce institutional costs, but it would eliminate these vital pieces of the investigative puzzle.

Similarly, SARs that appear inconsequential today may prove vital to future investigations. An entity that becomes the subject of multiple reports across different institutions can spark a significant inquiry. Because financial institutions do not share SAR data with one another, they cannot see the broader patterns that only law enforcement can discern. Financial Institution reports are rarely sufficient to resolve a case in isolation; rather, the synthesis of numerous SARs, CTRs and other reporting forms over time allows law enforcement to identify complex financial patterns and reconstruct criminal networks.

The argument for raising reporting thresholds based on inflation—that $10,000 in 1970 is equivalent to over $80,000 today—does not fully account for the fundamental transformation of financial transactions due to technological advancements over the past 56 years. In 1970, financial transactions often necessitated an in-person bank visit for deposits or check-cashing, making a $10,000 cash transaction inherently conspicuous and leading to the initial BSA guidelines. Conversely, modern banking in 2026 is largely digital, for example, the U.S. has approximately 550,000 ATM machines.  That substantially increases the number of physical cash access points and highlights the extensive and significant role in providing access to cash and banking services across varied geographies. Further, in 2026 transactions are conducted through payment processors, mobile platforms, direct deposit, debit and credit cards, which substantially increase access to cash while reducing the need to carry large sums. Given these profound shifts, a $10,000 cash transaction today is, regardless of inflation adjustments, arguably more anomalous and therefore more unusual and/or suspect, than it was when the BSA was enacted.

Finally, let’s not forget to take a look at this issue from the perspective of organized crime and terrorist networks.  Will the raising of BSA limits prevent bad guys from doing bad guy things?  No. In fact, it will make things easier for criminals and terrorists by lowering both their operating risk and, amazingly, lowering their operating costs.  Criminal organizations and terrorist networks would be able to function with more latitude, allowing for less complicated and less scrutinized placement of ill-gotten gains into the financial system.  Less reporting by financial institutions translates to less leads for law enforcement.  A win for the bad guys.

Ultimately, we have to ask ourselves one question.  Does raising the BSA reporting guidelines help in the fight against crime or terrorist activity?

Sincerely,
Kevin Sullivan, CAMS
President, The AML Training Academy and Advisory LLC
Investigator New York State Police (retired)

I work with AML/BSA/AFC/CTF compliance programs large and small, if you need a customized and quality anti-money laundering program, training, or advise I invite you to contact me to learn how I can help with your compliance needs.

Kevin Sullivan, CAMS, CCI

President of The AML Training Academy and Advisory LLC

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