Bank Secrecy Act - BSA

DEFINITION of 'Bank Secrecy Act - BSA'

Government legislation that was created in 1970 to prevent financial institutions from being used as tools by criminals to hide or launder their ill-gotten gains. This is achieved by requiring banks and other financial institution to provide documentation (such as currency transaction reports) whenever clients deal with transactions that involve substantial sums of money ($10,000 or more) that appear to be suspicious. This way, authorities have the ability to easily reconstruct the entire situation.

Also known as "Currency and Foreign Transactions Reporting Act".

BREAKING DOWN 'Bank Secrecy Act - BSA'

This is not to say that every transaction exceeding $10,000 is documented. The BSA has a list of exceptions that do not require documentation. Government departments/agencies and companies listed on the major North American exchanges are two examples of exempt parties.

While this act is useful in fighting criminal activity, as with all matters of privacy, the act is somewhat controversial as there are very few guidelines defining what is considered suspicious and law enforcement agencies do not need to get a court order to gain access to the information.

RELATED TERMS
  1. Structured Transaction

    A series of transactions that could have been treated as a single ...
  2. Money Laundering

    Money laundering is the process of creating the appearance that ...
  3. Currency Transaction Report - CTR

    A bank form used in the United States to help prevent money laundering. ...
  4. Account Hold

    Deposits that are delayed before being credited to an account, ...
  5. Smurf

    Colloquial term for a money launderer. Also refers to one who ...
  6. Closing Statement

    A document commonly used in real estate transactions, detailing ...
Related Articles
  1. Term

    What's Anti-Money Laundering?

    Anti-money laundering involves the laws and regulations designed to prevent criminals from generating income through illegal activities.
  2. Investing News

    How The Patriot Act Works & Why Is It Important

    The USA Patriot Act gave the government more muscle to fight financial crime after the Sept. 11 terrorist attacks. Here's an overview.
  3. Economics

    Understanding Money Laundering

    The process of creating the appearance that large amounts of money obtained from serious crimes actually originated from a legitimate source.
  4. Investing

    Arm's Length Transaction

    An arm’s length transaction describes business deals in which the buyer and seller act independently and with no interest in the other’s benefit.
  5. Real Estate

    Buying Luxury Property: How Private?

    A pilot program designed to cut back on money laundering in high-end residential real estate is bound to affect the transactions of cash buyers.
  6. Investing Basics

    What Are Transaction Costs?

    Transaction costs are expenses incurred from buying or selling securities.
  7. Investing News

    Guess Who Just Sued the Justice Department? (MSFT)

    Microsoft wants to let you know if the government has been going through your things.
  8. Credit & Loans

    What is a Financial Institution?

    A financial institution is in business to, among other things, accept deposits, make loans, exchange currencies, and broker investment securities.
  9. Professionals

    Private Banking Vs. Wealth Management: Not Quite the Same

    Discover the various ways in which private banking and wealth management services coincide, as well as the significant differences between them.
  10. Investing Basics

    Understanding Related-Party Transactions

    In business, a related-party transaction refers to a transaction where parties on both sides have a common interest or relationship.
RELATED FAQS
  1. Why does fighting money laundering reduce overall crime?

    Fighting money laundering reduces overall crime by helping identify perpetrators, restoring stolen money to victims and disrupting ... Read Answer >>
  2. If caught, what implications does money laundering have on a business?

    Understand the damaging effects of money-laundering on businesses as well as anti-laundering measures businesses can use ... Read Answer >>
  3. What methods are used to launder money?

    Learn about the methods that criminals use when they are looking to launder money. Many different methods are used, and they ... Read Answer >>
  4. Transactions are exempt from registration where …

    Transactions are exempt from registration where … a. A sale, or offer of sale is made to ALL clients of a brokerage ... Read Answer >>
  5. What are the GAAP standards for digital document storage?

    According to Sarbanes Oxley Act (SOX), companies are required to keep all documents that contain information about a company's ... Read Answer >>
  6. How do I open a Swiss bank account, and what makes them so special?

    Surprisingly, opening a Swiss bank account is not that much different from opening a standard bank account because you have ... Read Answer >>
Hot Definitions
  1. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  2. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  3. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  4. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  5. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  6. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
Trading Center