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FinCEN may grant temporary e-filing extension
WASHINGTON (2/27/12)--Small credit unions that lack internet access, and other institutions that meet certain criteria, could be given a temporary extension for complying with the Financial Crimes Enforcement Network's (FinCEN) new Bank Secrecy Act (BSA) electronic filing requirements, FinCEN announced late last week.

FinCEN will make electronic filing of all Bank Secrecy Act (BSA) reports mandatory on July 1. However, FinCEN said, small credit unions that do not have internet connectivity within their financial institution and file few BSA reports may submit a hardship exemption request for additional accommodation to arrange for the electronic submission of reports to FinCEN. FinCEN said any temportary exemptions that are granted to these institutions would not be extended beyond March 31, 2013.

Credit unions and other financial institutions that have the technical ability to e-file BSA Currency Transaction Reports (CTR) but are using aggregation systems that are currently incompatible with the BSA E-Filing System's batch and computer-to-computer reporting capabilities could also be granted an exemption, and given the time needed to update their computer systems. However, this reprieve would only last until December 31, FinCEN said.

The agency said it would also consider requests for temporary hardship exemptions, but noted that few of those exemptions would be granted. Any hardship exemptions that are granted would likely not be extended beyond March 31, 2013, FinCEN said.

Exemption requests must be filed with FinCEN by March 26.

FinCEN has said the switch to all-electronic BSA filing would improve efficiency, reduce costs for the financial industry, and enhance the ability of investigators, analysts, and examiners to gain better and more timely access to important financial information. Increased BSA E-Filing would also help FinCEN provide information relevant to money laundering and terrorist financing investigations to law enforcement in the quickest manner possible, shortening the lag time between when BSA reports are filed and when they can be accessed by authorities to two days, the agency added.

The Credit Union National Association (CUNA) has said it supports FinCEN's work to provide law enforcement with more useful and timely BSA data, and has encouraged credit unions to use electronic filing features, but also noted there are compliance and implementation cost concerns for credit unions.

CUNA in a comment letter urged FinCEN to work with the National Credit Union Administration (NCUA), state regulators, and third-party vendors "to minimize compliance costs related to the proposal," and suggested that FinCEN exempt credit unions with less than $50 million in assets from the e-filing requirements. CUNA also suggested that FinCEN provide a waiver for credit unions that demonstrate substantial core processing or system costs.

For a FinCEN release, a CUNA Comp Blog post on the issue and a comment letter on FinCEN's BSA changes, use the resource link.
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