FinCEN issued a fact sheet on October 31 to encourage financial institutions to increase information sharing under the USA Patriot Act. Section 314(b) of the Patriot Act provides a safe harbor with protection from liability to financial institutions who share information. The premise is to enhance information sharing to better identify and report potential money laundering or terrorist activities.
The fact sheet describes the institutions eligible to participate, the related process, the information that institutions can share and the anticipated benefits.
Section 314(b) of the Bank Secrecy Act is an effective tool that allows financial institutions to register with FinCEN and then share data regarding suspected criminal, fraudulent, or money-laundering activity – even information involving specific customers – under a “safe harbor” without risk of exposure to claims of violating applicable privacy laws. Banks have long had the ability to register and share information under 314(b) but until this fact sheet was issued, it was unclear whether non-bank money services businesses (MSBs) such as providers of prepaid access would also have the same access to 314(b) information. The fact sheet makes it clear that all MSBs can participate in and benefit from the 314(b) process. Instructions on how to register (by filing an on-line notification) are included in the fact sheet.
More information may be found here.