FinCEN And Fed Drop Plan For $250 Cross-Border Transfer Records
FinCEN says it and the Federal Reserve are withdrawing a 2020 proposal to expand transfer recordkeeping, with fresh comment required before similar changes.
US agencies are abandoning a 2020 proposal that would have required financial institutions to collect and pass on information for far smaller international transfers. The Financial Crimes Enforcement Network (FinCEN) announced the joint withdrawal with the Federal Reserve Board on 6th November.
The withdrawal notice says the agencies will not finalise that proposal. The Federal Register filing schedules publication for 9th November, when the withdrawal takes effect.
The Proposal Would Have Expanded Transfer Records
The original proposal, published on 27th October 2020, would have lowered the relevant threshold from $3,000 to $250 for transfers beginning or ending outside the United States. Domestic transfer thresholds would have stayed at $3,000.
Recordkeeping means institutions collect and retain specified payment information. Under the Travel Rule, information accompanies the transfer to other institutions in the payment chain. The proposal also sought to make explicit that the rules cover crypto functioning as money and digital assets with legal tender status.
The withdrawal stops those proposed amendments from taking effect through this rulemaking. It does not remove the underlying financial crime compliance rules. The proposal's withdrawal therefore leaves the current transfer requirements in place, rather than creating an exemption for crypto businesses.
Agencies Want Fresh Public Feedback
The agencies say the passage of more than five years makes further public feedback useful before any similar changes. They also cite a maturing crypto market and emerging legal frameworks, including the GENIUS Act for payment stablecoins, tokens designed to maintain a reference value for payments.
The notice records nearly 3,000 comments, although a large majority were similar form letters. It says opposition to the lower threshold was common, with concerns about compliance costs and remittances. Views on explicitly covering crypto were mixed.
The Disagreement Was About More Than Costs
In a 6th November response, Coin Center welcomed the withdrawal. The advocacy organisation argues that requiring financial institutions to retain details of many more ordinary transactions imposes privacy costs on individuals, alongside compliance costs on businesses. It says the agencies had not meaningfully assessed those individual costs.
Support for a lower threshold also existed. In its November 2020 account of a joint comment, The Clearing House said it and another banking group supported $250 for payments moving value into or out of the US. They sought a clearer, narrower test for identifying those international payments and supported including crypto in the definition of money.
The agencies say any comparable future amendments will need another opportunity for public comment. The withdrawal notice supplies no date for a replacement proposal.
