Measuring Effectiveness and Accountability
The Financial Crimes Enforcement Network (FinCEN) is charged with combatting financial crimes like money laundering and terrorist financing. In practice, that has resulted in FinCEN becoming a depository of financial information on Americans both large and small. FinCEN reported that it received more than 20 million Bank Secrecy Act (BSA) reports in 2019 alone.2 And it is estimated that complying with the BSA in 2019 cost the U.S. financial industry $26.4 billion––up from an estimated $4.8 billion to $8 billion in 2016.3 However, what is not known is what was done with those 20 million reports. FinCEN referred to the reports as providing “potentially useful information to agencies whose mission is to detect and prevent [financial crimes],” but it did not say if those reports were in fact useful to that mission.4
A 2018 study from the Bank Policy Institute (BPI) provides strong evidence that those reports were not useful.5 After surveying a sample of 19 financial institutions, BPI found that a median of 4% of suspicious activity reports (SARs) and an average of 0.44% of currency transaction reports (CTRs) required additional review from law enforcement (Figure 1). Even fewer reports likely resulted in stopping or apprehending criminals.
