What type of institutions must comply with the Bank Secrecy Act (BSA)?

The Bank Secrecy Act (BSA) mandates that not only banks and credit unions but a broader spectrum of financial institutions comply with its regulations. This includes any institution that engages in activities involving monetary transactions, such as those offering services related to money transmission, currency exchange, or various lending activities. By encompassing banks, credit unions, and a variety of financial entities, the BSA ensures a comprehensive framework that enhances the ability to detect and prevent money laundering and other financial crimes.

This approach is vital as it recognizes that a wide array of financial institutions play a role in the financial system, thereby increasing the potential for illicit activity. Institutions that fall under the BSA's jurisdiction must establish anti-money laundering (AML) programs and report certain transactions to assist in maintaining the integrity of the financial system. The more inclusive definition helps regulatory authorities to monitor activities across various types of financial institutions effectively.