By PAUL O’DONOGHUE, Senior Correspondent
U.S. authorities have clarified that financial institutions can share information about suspected fraud under the Patriot Act “safe harbor” provisions.
FinCEN, the U.S. Treasury’s AML unit, issued updated guidance confirming that firms participating in the Patriot Act’s Section 314(b) information-sharing programme may exchange information related to “suspected fraud, money laundering, terrorist financing, or other specified unlawful activities”.
According to the agency, firms may share “video surveillance footage”, cyber-related data such as “IP addresses”, and a range of fraud indicators.
Examples include:
- Newly added payees followed by large transfers
- Multiple accounts with the same or similar identifying information
- Login activity from geographically distant places.
Section 314(b) of the US Patriot Act is a voluntary program that allows financial institutions to share information with one another under a ‘safe harbor’ that protects them from civil liability.
FinCEN also published a 10-page fact sheet, available [HERE], explaining in detail what information institutions can share when investigating suspected fraud.
Fraud data sharing under Patriot Act
U.S. Treasury Secretary Scott Bessent said: “Americans lose hundreds of billions of dollars to fraud each year. At Treasury, we know financial institutions are often the first to see suspicious activity in real time.”
“They need the tools to act quickly and share information that can help stop fraud before it spreads.”
FinCEN said the updated guidance confirms that a financial institution “may share information about activity involving suspected fraud”. It can also share that information with other eligible institutions “to identify illicit financial activity”.
FinCEN said information sharing between and among financial institutions is “vital to combating fraud and other financial crimes”.
It added that it “strongly encourages financial institutions to share information related to money laundering, terrorist financing, fraud, and other criminal activities”.
FinCEN said: “Information sharing under section 314(b) is an essential component of Treasury’s efforts to modernize the U.S. AML regime to make it more risk-based and outcomes-focused.”
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