Why should you participate?

Your participation in information sharing does the following:

• Allows credit unions to significantly expand the range of information available for assessing potentially suspicious activity without increasing risk.
• Aids in the identifying and detection of money laundering and terrorist finance activities.
• Demystifies or expounds financial trails, especially those that are large and complex.
• Assembles a more comprehensive and accurate picture of the member’s activities.
• Fosters more comprehensive SARs filings with the inclusion of 314(b) information sharing than otherwise if absent.
• Alerts other participating financial institutions to members whose suspicious activities they may not have been previously aware.

What information should you share? 

A credit union may share information about suspected money laundering or terrorist financing even if the credit union cannot directly tie the activity to proceeds of a “specified unlawful activity” (SUAs).

Furthermore, a credit union may share information that could involve possible terrorist activity or money laundering even if such activities do not constitute a “transaction” but are simply “attempts” to engage in transactions suspected of money laundering or terrorist activity.

FinCEN provides further details on SUAs and covered information in the available “Section 314(b) Fact Sheet” released in December 2020. The December 2020 Fact Sheet replaced the November 2016 version and rescinded the 2009 guidance (FIN-2009-G002) and 2012 administrative ruling (FIN-2012-R006).

As I mentioned previously, Section 314(b) of the USA PATRIOT Act allows for the voluntary information sharing among financial institutions, congruent with protections from civil liability under a safe harbor.

To receive safe harbor protection, credit unions must follow conditions for 314(b) participation: 

1. Submit a registration to FinCEN.

A credit union can submit an online registration with FinCEN and should designate point-of-contact(s) for receiving and providing information. Participants will receive an acknowledgement from FinCEN, which is effective for one year.

2. Share information with other 314(b) participants.

Search the 314(b) participant list or download the list from FinCEN’s Secure Information Sharing System (SISS). FinCEN updates the list in real time.

3. Safeguard shared information and use only for AML/CFT purposes

Establish procedures to protect the security and confidentiality of 314(b) information shared or received. Section 314(b) does not authorize a credit union to share a SAR, nor does it permit the disclosure of the existence or nonexistence of a SAR. A credit union may use information obtained under section 314(b) to determine whether to file a SAR, but the intention to prepare or file a SAR cannot be shared. To note, there is the exception if financial institutions are filing a joint SAR.

For more comprehensive guidance on information sharing, below are two helpful resources:

• FinCEN’s section 314(b) online resource index
• FinCEN’s provided 314(b) Fact Sheet (December 2020)

The most recent development in information sharing is the Anti-Money Laundering Act of 2020, which expands information sharing into a global landscape. Check out this prior article discussing the future of information sharing in AML.