The Bank Secrecy Act (BSA) establishes regulatory requirements for financial institutions, including certain registered money services businesses (MSBs). These requirements, which include anti-money laundering (AML) and counter-terrorist financing (CTF) programs, are not universally applied to all MSBs. Instead, applicability is determined by specific criteria and thresholds established by regulatory guidance. For example, the criteria might include transaction volume, type of financial activity, or geographic location.
Conditional application of BSA regulations to MSBs allows for a risk-based approach, focusing regulatory scrutiny where it is most needed. This targeted oversight helps prevent financial crimes while minimizing regulatory burden on smaller or lower-risk businesses. Historically, this approach has evolved alongside the changing landscape of financial crime, adapting to new technologies and evolving criminal methodologies. Effective implementation ensures the integrity of the financial system and contributes to national security efforts.
