FinCEN Promotes Safe Harbor to Encourage Banks to Share Fraud Information

FinCEN promoted the use of a safe harbor that allows greater information sharing among financial institutions to help detect fraud, money laundering, terrorist financing, narcotics trafficking, sanctions evasion, and other criminal activity.

The guidance focuses on Bank Secrecy Act Section 314(b) ("Structured Transactions: Currency Reporting Requirements") and expands and replaces FinCEN's December 2020 guidance. In the Fact Sheet, FinCEN explained that institutions may share information about suspected fraud among themselves because fraud offenses are predicate crimes for money laundering, making them "specified unlawful activities." FinCEN said an institution need not identify specific laundered proceeds to qualify for the safe harbor; it is enough that it suspects activity may involve possible money laundering or terrorist financing.

FinCEN said neither the Bank Secrecy Act nor its rules limit the method or types of information shared. Institutions may share in writing, verbally, or through electronic platforms, and in real time, and may exchange transaction records, video footage, internet-protocol addresses, device identifiers, and account decisions. Institutions may share even when the receiving institution has no existing relationship with the subject, and may use what they receive to decide whether to open or keep an account.

FinCEN said (i) participation in the safe harbor remained voluntary and required registration through its Financial Industry Portal, (ii) that participants must confirm a counterpart is registered, and (iii) that they must safeguard shared information and use it only for anti-money-laundering purposes. FinCEN said institutions may file joint suspicious activity reports.