FBI Fights to Maintain Cash Transaction Reporting

Stephen Harris

10 April 2006

The US Federal Bureau of Investigation has argued against a loosening of the requirement for banks and other financial institutions to report cash transactions in excess of $10,000. Although the US Government passed a broad regulation-relief bill last month, which, among other things, would grant some exemptions from filing the cash reports, the US Senate has not yet introduced its own version. At a hearing last week before the Senate Banking Committee, the FBI argued that the currency-transaction reports filed by banks provide valuable intelligence in money-laundering and terrorist-financing investigations. "To dramatically alter currency transaction reporting requirements without careful, independent study could be devastating and a significant setback to investigative and intelligence efforts," Michael Morehart, the FBI's terrorist-financing-operations section chief, told the panel. Stuart Levey, the Treasury Department's undersecretary in the office of terrorism and financial intelligence, recommended that the committee request that the Government Accountability Office do a thorough study about the effectiveness of the reporting program before proposing changes. Senator Paul Sarbanes, the corporate governance campaigner, said law-enforcement officials "laid out a strong rationale for the utility of the reports. We've got to strike a balance." According to the American Bankers Association, the number of transaction reports now tops 13 million annually, costing banks and other financial institutions $187 million in wages. The ABA argues that cash reporting has been superseded by new customer identification systems and other suspicious-transaction reporting requirements.