CRCM Practice Exam - Certified Regulatory Compliance Manager Prep & Study Guide

The Bank Secrecy Act (BSA) is the federal act that specifically mandates banks and other financial institutions to implement anti-money laundering (AML) programs. This legislation was enacted to combat financial crimes and requires institutions to help the government identify and prevent money laundering activities. The BSA requires the establishment of internal controls, training programs for staff, and a compliance officer to oversee the AML efforts.

The BSA also necessitates that banks report certain transactions, especially those that appear suspicious or exceed specified thresholds, to the Financial Crimes Enforcement Network (FinCEN). This reporting mechanism plays a crucial role in detecting and preventing illicit financial activities, making effective AML programs essential for maintaining the integrity of the financial system. Therefore, understanding the BSA is vital for compliance professionals in the banking sector, as it outlines the framework within which they must operate to comply with federal regulations.