FinCEN Wants Help in Streamlining 314(a) Requests

The Financial Crimes Enforcement Network (FinCEN) recently published a notice and request for comments related to Section 314(a) requests. FinCEN is looking for comments related to these requests to understand the burden these represent for financial institutions and the processes used to comply with the BSA requirements related to 314(a) requests.

The Section 314(a) request was part of USA PATRIOT Act back in 2001 and was added to the BSA regulations the following year. The rules require financial institutions to search their records for information related to transactions with individuals, entities or organizations that law enforcement agencies have certified is suspected of engaging in terrorist activity or significant money laundering. Further, the requesting agency must certify that they have not been able to locate the information they are seeking through the 314(a) request through traditional methods of investigation.

These 314(a) requests require financial institutions, upon receipt of the request to search their records to determine whether the individual, entity or organization named in the 314(a) request currently maintains any accounts at the financial institution. Further, institutions are to search their records to determine whether those named in the 314(a) request maintained an account at the financial institution within the past 12 months. Additionally, financial institutions are to search their records for any transactions conducted by or on behalf of one of those named in a 314(a) request. Finally, institutions are to search their records to determine if any funds were transmitted in which the named subject of the 314(a) request was either the sender or receiver during the previous six months. The regulations require that institutions that identify accounts or transactions in response to the 314(a) request to report the match to FinCEN in the time frame specified on the request, and that institutions designate one person to be the point of contact for the institution for Section 314(a) requests.

FinCEN is seeking comment on the hourly burden and costs associated with complying with 314(a) request, in particular the estimated amount of time spent per subject and the levels of employees engaged in responding to these requests. FinCEN estimates that searches average about 4 minutes per subject with an average cost of about $95 per hour, and they’re also seeking feedback about the validity of their estimates.

FinCEN is additionally seeking comment on which employees participate in the 314(a) searches, and the involvement of senior management with the searches or reviewing of results. FinCEN would also like to know the extent that institutions can rely on existing software to conduct its 314(a) searches and what types of records the institution maintains to document that a search has been conducted.

Further, FinCEN is interested in the procedures institutions use when a match to a 314(a) request, including the determination of it being an actual match or a false positive. How often does the institution generate a positive match that requires additional research for confirmation? How often does the institution identify matches that ultimately result in a false positive?

This FinCEN notice has a comment period that is open until Friday September 9, 2022.