FinCEN: FI Data Sharing Vital In Crime Prevention

Financial Crimes Enforcement Network (FinCEN) Director Kenneth A. Blanco, speaking on Thursday (Dec. 10) about ways to stop financial crime, said one of the key elements is sharing information, according to a press release.

Blanco said sharing information could help with “identifying, reporting and preventing financial crime,” which has been rampant during the pandemic.

Speaking to the annual American Bankers Association/American Bar Association Financial Crimes Enforcement Conference, Blanco spoke of the information sharing program, including an important Patriot Act provision, Section 314(b), according to the release. That section gives financial institutions (FIs) the ability to share information with one another with a safe harbor provision giving protection from civil liability, which helps to better identify and report potential money laundering or terrorist financing activities.

FinCEN, according to the release, got feedback from the financial industry, and Blanco provided three clarifications.

The first is that any FI can share information it suspects could be related to money laundering, and while that may include circumstances where the FI has information that could specifically involve some crime, it doesn’t need to have specific information to share it, the release stated. In addition, FIs don’t have to have made a conclusive opinion that the activity is suspicious in order to get the safe harbor, and FIs can share information about activities that might not be “transactions,” including attempted transactions or attempts to get others to do a transaction.

The second is that an entity that isn’t an FI can form and operate an association of FIs whose members can share information, including compliance service providers, the release stated.

And the third is that an unincorporated association, governed by a contract among a group of FIs, can engage in information sharing under 314(b), the release stated.

That kind of collaboration is also key for open banking, PYMNTS reported, which is seeing an increase in demand in the U.S. as customers seek more control and visibility over what’s happening with their data.