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Sharing is caring: Benefits of the new FinCEN Exchange

By: Emma Troupe, BSA/AML Investigator

Information sharing between financial institutions has always been a crucial component in identifying money laundering concerns. Not only does the sharing of information help further detail investigations occurring at one institution, but it can also help other banks and/or credit unions identify activity happening within their own organizations.

Primarily, forms of contact between two financial institutions has occurred pursuant to Section 314(b) of the USA PATRIOT Act of 2001, with Law Enforcement contact occurring in accordance with Section 314(a). However, an additional layer has recently been added that we’ll explore more in this article.

FinCEN Exchange: Better identify risks, help other organizations receive information and support

On December 4, 2017, the Financial Crimes Enforcement Network (FinCEN) created a new program called FinCEN Exchange to improve information sharing with financial institutions. The primary goal of the Exchange is to foster collaboration between three primary sectors — FinCEN, law enforcement, and financial institutions— and hold briefings in which the following can occur:

  • Risks can be identified and prioritized
  • New and upcoming financial threats can be detailed
  • Current typologies can be further defined (in addition to identifying new ones)

While the Exchange is still voluntary and does not change any regulatory requirements, it allows for better contact between the three sectors and a better chance to collaborate collectively rather than in separate mediums. It also helps further identify what major issues and trends organizations are seeing and how there can be a more holistic approach to solving those alleged issues.

More regular briefings planned by FinCEN

Over the past three years, FinCEN has held a dozen or so briefings with both financial institutions and law enforcement to discuss investigations and typologies. Now, with the FinCEN Exchange in place, FinCEN plans to have more regular briefings across the entire nation to share information they have and vice versa. FinCEN has stated that topics will differ per briefing and hopes that the information they share will better assist in identifying concerns across the board.

Positive feedback from piloted briefings

Under Secretary of the Treasury for Terrorism and Financial Intelligence Sigal Mandelker spoke on December 4, 2017, to further detail FinCEN Exchange to the American Bankers Association and the American Bar Association Financial Crimes Enforcement Conference. Mandelker discussed how information that was provided within piloted briefings helped map out and target sophisticated money laundering operations, thus proving that the newly formed program will be beneficial to the public and private sectors. Feedback that came from those institutions involved in the pilot program was positive and the information was “invaluable” at helping their resources work against threats.

What’s next?

In consultation with law enforcement, FinCEN will invite financial institutions to participate based on a variety of factors, including whether they may possess information relevant to a particular topic. The following link may also be beneficial for further guidance and additional information regarding FinCEN Exchange: