Must-pass defense bill could mean fewer BSA reports

• What’s at stake: There’s a push to include a bill that would reduce BSA requirements in must-pass defense spending legislation. 
• Forward look: The bill’s inclusion in that spending package isn’t likely to face procedural challenges.  
• Key insight: The effort could be part of an answer to Republicans’ political crusade on debanking. 

WASHINGTON — Lawmakers are pushing to include a bill in a must-pass defense spending package that would reduce the amount of Bank Secrecy Act filings that banks and other financial institutions need to submit. 
It’s a series of seemingly small technical changes that actually plays into one of the biggest political battles around banking since Congress debated Dodd-Frank. Two people familiar with the matter told American Banker that there’s an effort to include the bill as an amendment to the defense spending bill, a critical must-pass bill under negotiation in September. 

The push to include the bill in the defense package comes amid a broader Trump administration push to root out so-called debanking, and could be at least part of an answer to banks’ complaints that they must be overly cautious about offloading accounts due to BSA requirements. The provision was always under consideration for inclusion in the defense spending bill, but it has gained momentum due to the push on debanking, the sources said. 

The bill makes a number of threshold changes to when banks need to make reports to parts of the Treasury Department. It would raise the Currency Transaction Report threshold from $10,000 to $30,000 and index it to inflation, and double the Suspicious Activity Report threshold from $5,000 to $10,000. 

The bill has a better-than-average shot of becoming law, although even the most uncontroversial bills can face a long road in a tightly divided Congress. Some industry groups, including the Defense Credit Union Council, have also pressed Congress for it to be included in the National Defense Authorization Act, the must-pass defense spending bill that can be passed with a simple majority vote. Because of that simple majority rule, the NDAA has become a popular vehicle by which lawmakers can attach semi-related bills. 

The DCUC said that the bill would both reduce burdens on its member institutions and increase consumer financial privacy. 

It’s hard to argue that this bill, which would amend the Bank Secrecy Act, wouldn’t be germane to defense issues. It doesn’t face the same material obstacle that, for example, deposit insurance reform might as lawmakers debate whether that should be included. 

The bill was introduced by Rep. Barry Loudermilk, R-Ga., in March.