The Federal Reserve and the Financial Crimes Enforcement Network (“FinCEN”) issued a final rule on December 3 that amends the definitions of “funds transfer” and “transmittal of funds” under the regulations that implement the Bank Secrecy Act (“BSA”). According to the agencies, the amendments are needed to retain the current scope of the definitions as a result of changes to the Electronic Fund Transfer Act (“EFTA”) made by the Dodd-Frank Act. The amendments become effective on January 3, 2014.
Nutter Notes: The regulations that implement the BSA exclude from BSA recordkeeping requirements certain types of transactions and payment systems that are used mostly for domestic retail transactions and payments. These exclusions (namely ATM, point-of-sale and automated clearinghouse transactions) were made by cross-referencing the EFTA in the definitions of funds transfer and transmittal of funds. As a result of this cross-referencing, amendments to the EFTA made by the Dodd-Frank Act would have unintentionally expanded the scope of the transactions excluded from BSA recordkeeping requirements.