The Bank Secrecy Act

An analysis of the Bank Secrecy Acy

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Published April 23rd, 2026

Written by Zach Brown

The Bank Secrecy Act (BSA) was legislated by Congress in October of 1970. This act, while enacted in good faith, has run its course. The BSA no longer promotes economic efficiency nor does it deter crime, making its continuous implementation a burden on banking efficiency and, most importantly, the American taxpayer. 

The BSA and the anti-money laundering regime are laws and regulations enacted to stop the crime of money laundering and fraud throughout American institutions. In summary, according to the Financial Crimes Enforcement Network “The BSA authorizes the Department of the Treasury to impose reporting and other requirements on financial institutions and other businesses to help detect and prevent money laundering….keeping file of all currency transactions exceeding $10,000, as well as submitting Suspicious Activity Reports.” The legal reasoning is sound — to monitor financial activity — but the issue lies within Statute 31 U.S.C. 5313. This statute enforces excessive regulations to financial institutions by legally requiring them to report transactions exceeding $10,000. This forces banks to monitor a conspicuous amount of transactions continuously throughout the year, creating a backlog of millions of fillings and reports a year. Statute 31 U.S.C. 5318 adds more to this burden, allowing the Treasury and the FinCEN to enforce five separate processes of compliance, including SARs, customer identification requirements, strict recordkeeping of legal activity, internal AML programs and training and increased security measures. Money laundering is an issue that needs to be addressed, but over regulation and increased compliance have proved lackluster in thwarting these crimes. 

The cost of regulation and compliance, weighed against the amount seized every year, is a drastic and clear display of inefficiency with American taxpayer money that could be reinvested into the economy, ultimately benefitting citizens at large. The House Committee on Financial Services Subcommittee Chair Warren Davidson quoted, “For example, FinCEN's own data shows that from 2014 to 2023, law enforcement agencies only accessed about 5.4% of the millions of currency transaction reports filed under the BSA—highlighting how this flood of paperwork buries real leads in bureaucracy instead of stopping bad actors,” Additionally, according to FBI Statistics, roughly $300 billion, to a potential of $750 billion is illegally laundered through the US economy. This enormous number accounts for 2.5-5% of the American GDP. What is more daunting is the FBI, IRS and DOJ alike do not have explicit numbers posted in regards to money seized, rather, they use abstract metrics and fiscal periods to seem as though the laundering efforts are not in vain. Assuming the best, the IRS in 2025 seized $10.59 billion, the DOJ from 2016-2024 seized $7.9 billion and the FBI in 2025 seized $16 billion. In total this results in $34.49 billion caught over the span of several years. If the FBI is right in alleging $300 billion is laundered every year, then only 11.5% is caught annually. If that number is higher, the percentage goes down and displays a glaring issue — the AML regulations and methods seem defective. But, $34.49 billion caught is still a net positive — until one realizes the compliance cost alone is $61 billion dollars. The current BSA and AML practices seem to be all cost and no gain. 

With all these factors considered, the BSA and AML regulations do not comply with the U.S. government's obligation to increase economic output and strength. Under 31 USC 1111, the President shall conduct a research report and present it to Congress to ensure agencies, activities, business plans and methods are geared toward economic development; if they are not, there must be plans for change. Federal policies emphasize efficient and economic optimization, yet the AML appears inconsistent with these goals. Furthermore, under Bill S.2155 enacted by Congress, it explicitly aimed to reduce economic burdens by decreasing regulations in banks and financial institutions. The combination of just these two laws alone express the utmost importance of economic growth and burden relief for the taxpayers in America — something the BSA and AML regulations hinder significantly. A study conducted by Law.com, revealed the “U.S. and Canadian financial institutions collectively invest $61 billion a year on financial crime compliance costs.” This poses an extreme threat to banks, financial institutions as well as heightening opportunity costs, as the $61 billion in compliance costs could be utilized elsewhere. These compliance expenditures represent substantial opportunity costs, resources could be devoted to fiscal investment, expanded lending, lower mortgages and financial innovation. 

Recently, in October 2025, Congress proposed a bill titled the STREAMLINE Act . This bill has the potential to address the plethora of issues found in the BSA and AML regimes — issues that have been static since its inception. Substantially, this act could raise the minimum threshold of CTR reports from the current transactions of $10,000, which has not been adjusted once for inflation, to a relevant $30,000. This will drastically change the outlook and focus of suspicious activity from petty amounts to legitimate suspicion. Additionally, it will increase the SAR’s report dollar amount from $3,000 to $10,000, with a future adjustment for inflation. 

The Bank Secrecy Act and the entire Anti-Money Laundering regime was enacted in good faith. Money laundering is a serious offense that should be investigated and stopped, but the current efforts are ineffective and have a significant impact on our economy at large. Optimistically, the STREAMLINE Act will get passed in the future and address these issues. Until then, the United States banking system and financial institutions will internalize these costs, drastically undermining Americans at large. 

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