By: Reena Miller, Senior Bank Secrecy Act Auditor
There are distinct advantages for financial institutions who participate in information sharing 314(b). It will help protect community banks from financial and reputational risk as well as paint a better picture of the customer whom they are doing business with. According to Section 314(b) of the USA PATRIOT ACT, financial institutions are provided with the ability to share confidential information with other institutions. It’s a voluntary program which offers protection from any civil liability.
Under 314(b), financial institutions or affiliates of financial institutions may share information with each other regarding individuals, entities, organizations, and countries for purposes of identifying, and, where appropriate, reporting activities that may involve possible terrorist activity or money laundering. It’s available to banks at no additional cost. They can request information from other financial institutions and can make their own conclusion about the customer without being held liable.
While 314(b) is a voluntary program, FinCEN is strongly encouraging all banks to participate in information sharing. Since small community banks have limited resources, participating in 314(b) will become an additional tool to assist banks in enhancing their compliance with anti-money laundering/counter-terrorist financing requirements. It will provide additional information on a transaction, specifically if the transaction is more complex and layered. It will aid institutions to build a more accurate picture of a customer’s activities in the event that an institution is considering filing a Suspicious Activity Report (SAR).
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