The BSA's CTR Threshold Debate: The Wrong Answer to a Real Problem: Why Cutting the People Responsible for Investigations Makes It Worse

There is a valuable conversation that’s been happening and picking up steam about modernizing the Bank Secrecy Act and I'm glad it's happening. The STREAMLINE Act (S.B. 3017), introduced on October 21, 2025 that proposes raising the Currency Transaction Report (‘CTR’) threshold from $10,000 to $30,000, a level unchanged since the BSA was enacted in 1970. Community banks, the American Bankers Association, the Independent Community Bankers of America, and state banking associations have lined up in support, arguing that the current threshold generates a flood of filings that overwhelms compliance resources and produces minimal law enforcement utility.

They're not entirely wrong about the problem. In my opinion, they’re wrong about the solution.

I say this as someone who has been inside global financial institutions working AML/CFT cases in the immediate aftermath of 9/11 and through the 2008 financial crisis - both in AML and fraud investigations. I stressed financial institutions to utilize 314(b) before it was widely understood or adopted. The fight isn't about reducing the data. It's about whether the right people, with the right tools, have the ability and resources to utilize it.

A Note on Inflation and Why It Misses the Point

In reading an article put out by the Bank Policy Institute, it noted that $10,000 in 1970 would be worth nearly $80,000 today, as many other proponents of the STREAMLINE Act have cited similar amounts. The inflation argument is real. However, the purpose of a CTR is not to capture transactions of economic significance relative to 1970 purchasing power. The purpose is to create a money trail - to detect, deter, and combat money laundering, tax evasion, and terrorist financing. That mission does not scale with inflation and I think this foundational purpose has gotten lost. The illicit activity being tracked does not stop because the dollar amount feels smaller today than it did fifty years ago.

The Volume Problem Is Real - The Fix Isn't a Higher Threshold

Financial institutions filed over 20.5 million CTRs in 2024, that is approximately 56,000 filings processed every single day. According to the U.S. Government Accountability Office (‘GAO’), financial institutions filed more than 167 million CTRs between fiscal years 2014 and 2023, yet only approximately 5.4% were accessed by law enforcement through FinCEN's BSA Portal during that period. That is an extraordinary underutilization rate. Stunning, actually, given the technological advancements of the last decade: the same decade in which bad actors, fraudsters, cartels, and traffickers have significantly expanded their laundering operations using those very same technological advancements as well as known coordination and cooperation amongst these various nefarious groups.

The GAO conducted interviews with compliance leaders at mid-size banks indicating that raising the CTR threshold could eliminate 75% to 94% of their filings. One compliance leader put it plainly: the reduction would save "like a quarter of a person" because CTR generation and filing processes are already highly automated. The operational relief argument, in other words, is significantly overstated.

My answer is not to stop generating the data. My solutions are to get to the root issues and provide actionable, yielding positive-result solutions to ensure that the technology across regulatory and law enforcement agencies is available, funded, and utilized daily and to use what we already have but in a more efficient, effective manner.

Here's What a Higher Threshold Actually Does to Bad Actors

It doesn't stop them. It relocates them.

An increased threshold would simply shift monitoring challenges upward. Those investigations would move ‘structuring below $10,000’ to ‘structuring below $30,000’ without resolving the underlying problem. Raise it to $30,000 and structuring moves to $28,000. Raise it to $50,000 and it moves to $48,000. How much illicit activity do you miss at that point? The window for criminal activity widens, and the transactional data trail that connects the dots across typologies, institutions, and jurisdictions narrows. Banks will miss out on all those connections.

The value of CTRs has never been within any single filing. It is in the aggregate. Financial crimes are about patterns, networks, and behavioral anomalies and those only become visible when you analyze millions of transactions over time, whether it’s 3 to 6 months or up to 12- months. Remove that data and you are not reducing noise – you are eliminating red-flag signals.

FinCEN's own Geographic Targeting Order in March 2025, requiring MSBs along the southwest border to file CTRs on transactions between $200 and $10,000 to combat cartel money laundering, makes one of my points even better than any argument could. In high-risk environments, the answer is more reporting granularity, not less.

The Power of 314(b): It Belongs at the Center of This Debate

Here is where I want to make an argument that is not getting enough attention in the CTR threshold debate: Section 314(b) of the USA PATRIOT Act is one of the most powerful and most underutilized tools in the AML compliance arsenal and its recent expansion makes it more relevant than ever.

On June 12, 2026, FinCEN issued updated guidance significantly broadening the scope of 314(b) voluntary information sharing among FIs to explicitly include suspected fraud offenses, confirming that real-time information sharing is permitted verbally, in writing, or through electronic platforms; and clarifying that a FI may share information with any registered institution, even where the receiving institution has no existing relationship with the individual or entity involved. (FinCEN, Section 314(b) Fact Sheet, June 12, 2026.)

This is a significant development. And it sits in the direct line of fire with the push to raise CTR thresholds.

Here is why: the financial crimes that matter most: trade-based money laundering, human trafficking networks, drug trafficking organizations, sanctions evasion - almost always leave some type of trace across multiple institutions. It is intentional and why we teach and educate on the layering of transactions across accounts and entities - because it is the core method of money launderers, as it specifically designs their modus operandi to fall below any single institution's detection threshold. A drug trafficking organization that structures deposits across three regional banks looks like low-risk activity at each individual bank. With 314(b) utilized, all three institutions can legally and easily confirm the connection, aggregate the picture, and file a coordinated SAR.

Less than 1% of SARs filed between 2017 and 2019 referenced 314(b) in their narratives - an extraordinary underutilization rate for a program with this much potential. (RegTech Consulting, 314(b) Information Sharing - A Valuable, but Underutilized Tool.)

The 314(b) program works - I’ve seen it personally many times, in some of the most interesting cases I’ve worked on in my career from terrorist financing, to cartel and organized crime networks, to human trafficking and various fraud rings. It is simply not being used at the scale the threat environment demands.

Raising the CTR threshold reduces the foundational data that makes 314(b) collaboration meaningful. You cannot share intelligence you were never required to generate.

The Real Problem: The Data Exists, but Who Is Connecting It?

The BSA reporting framework isn't failing because institutions are filing too many CTRs. It's failing because the intelligence generated within those filings isn't being fully utilized, analyzed, correlated, or acted upon.

FinCEN and law enforcement agencies have not kept pace with technology tools and staffing needs, particularly over the past two decades. Budgets have been constrained while regulators have simultaneously pushed banking institutions to upgrade their own technology, move away from manual processes, and keep pace with the rise of fraudsters, money launderers, scammers, and bad actors who leverage the latest AI and technology daily. Who ever would have thought KYC onboarding teams, amongst other customer-facing teams, would have to ask customers on a camera portal to ‘turn to the left, turn to the right’, ‘wiggle your fingers’ to spot deepfakes? But I digress.

Multiple SARs filed by different institutions on the same bad actor sadly go uncorrelated. The result is that financial institutions are doing their part- generating reporting data at considerable cost and effort- while that data sits in a portal accessed less than 6% of the time.

The fix isn't fewer filings. It's smarter analytics, better inter-agency connectivity, and a FinCEN that is resourced and empowered to function as the FIU it was designed to be by cross- correlating SARs across institutions, identifying networks, and converting reporting data into actionable intelligence for law enforcement.

What Happened to the AMLA Reforms?

Remember the Anti-Money Laundering Act of 2020? It mandated a formal review of BSA reporting requirements and created a comprehensive review of existing exemption procedures , the Designation of Exempt Person rules, allowing financial institutions to exempt lower-risk customers from CTR filing based on a risk-based analysis. This was a targeted, thoughtful approach: reduce burden where risk is genuinely low without creating a blanket blind spot across the system.

On April 7, 2026, FinCEN formally withdrew the prior AML/CFT program rule tied to AMLA. That withdrawal deserves more attention than it has received.

And Now the Budget Problem: Cutting the People Responsible for Investigations

This is now where I bring up the serious issue around budgets.

The White House's fiscal year 2026 budget proposal calls for cutting the budgets of the DEA, the ATF, and the FBI - the very agencies responsible for acting on the financial intelligence that financial institutions generate at considerable time, effort, and cost. Prior budget proposals have called for reducing the workforce of IRS Criminal Investigation special agents by 26%.

Consider what IRS-CI alone produces: in FY2025, approximately 3,000 IRS-CI employees identified $10.59 billion in financial crimes, a 15.7% increase from the prior year, seized more than $800 million in assets, and returned $100 million to crime victims. That is an extraordinary return on investment for the American taxpayer. And we are talking about cutting it.

Throughout 2025, not one U.S. bank faced a major AML, CFT, or sanctions penalty. That has not happened in over twenty years. I have said this before and I will say it again: a lack of enforcement actions does not mean there is less risk. It means risk is accumulating without consequence - an environment bad actors are exploiting.

The numbers and metrics tell this story. Money laundering and financial crimes are rising. Fraud is surging. AI-powered scams, deepfakes, synthetic identities, and cartel networks are not slowing down. Yet the financial industry players are proposing to raise the reporting threshold, which reduces the transactional data available to law enforcement, while budgets are being cut for the very agencies responsible for acting on it.

This is not modernization. It is a compounding vulnerability.

On FinCEN’s own website, and within FinCEN’s FY2024 Year in Review, FinCEN’s mission is stated clearly: “to safeguard the financial system from illicit activity, counter money laundering and the financing of terrorism, and promote national security through strategic use of financial authorities and the collection, analysis, and dissemination of financial intelligence.”

If our own FIU cannot fulfill that mission because staffing isn’t there, the technology budget has been stripped, and the agencies responsible for acting on the valuable intelligence are being cut - then we are not modernizing the BSA and the framework for it. It becomes a hollow shell.

The question is no longer whether reform is needed. It is whether the reforms being proposed will actually make the financial system, the financial industry safer. Or is it only concerned with making the paperwork lighter as the financial crimes and very real threats grow in volume and intensity?

What Should Actually Happen

The BSA framework does need to be updated and reformed for the world we live in today. The reforms that will actually make a positive difference are not the ones getting the most attention:

→ Simplify the CTR framework - revise and streamline the CTR form, removing redundant and unnecessary fields; review and clarify aggregation requirements, eliminating those that no longer demonstrate clear value

→ Fix the exemption framework - expand and streamline CTR exemptions for clearly low-risk, well-known customers rather than raising the threshold broadly across all institutions and customer types

→ Maximize 314(b) - the June 12, 2026 FinCEN guidance is a significant step forward; now financial institutions must embed 314(b) deeply into AML program culture, workflows, and SAR processes — not treat it as optional

→ Resource FinCEN as a true FIU - FinCEN must not be treated as a reporting repository; the U.S. must invest in the analytical infrastructure to cross-correlate SARs, identify networks, and push actionable intelligence to law enforcement in real time

→ Invest in law enforcement capacity - the return on investment from providing financial crimes investigators with the adequate tools and staff is positively measurable; cutting these agencies during a period of rising financial crime is a strategic error with national security consequences

→ Deploy AI and data analytics - the answer to data overload is smarter, faster analysis not less data; institutions and FinCEN alike must leverage AI to find the patterns that manual, time-consuming reviews miss

The financial institutions doing the hard work of BSA compliance deserve a system that uses what they report. The answer is not to report less per se. It is to build the analytical, technological, and enforcement infrastructure that makes quality reporting matter and to fund the agencies that turn that reporting into results.

Criminals do not wait for your budget to get approved or wait while you receive less and figure out how you’re expected to ‘do more’. They do not pause for regulatory reforms and they certainly are knowledgeable when ‘roll-backs’ in regulations occur. These criminals aren’t just hiding behind Tor browser and the dark web. Cartels, CMLNs, fraudsters, intermediaries and internal threats all adapt: they scale, and exploit every gap we create.

It is time for FinCEN and our law enforcement agencies to come together, harness the power of the data that financial institutions generate every single day, update the BSA for the world we actually live in, and receive the budgets needed to match the threat. There is always a choice to decide what is right. When those choices affect the integrity of our financial industry and U.S. financial system to prevent money laundering, terror financing, human trafficking, fraud and other related financial crimes, those with the power must remember what that choice costs and the real people behind the consequences.

Cooperation, intelligence sharing and actioning intelligence has never been more important.