The "Financial Reporting Threshold Modernization Act" updates currency transaction and suspicious activity reporting thresholds to reflect inflation and modern economic values.
Barry Loudermilk
Representative
GA-11
The Financial Reporting Threshold Modernization Act updates the thresholds for currency transaction reports and suspicious activity reports to reflect inflation. It raises the threshold for currency transaction reports from $10,000 to $30,000 and mandates updates every 5 years based on the Consumer Price Index. Additionally, it increases the reporting threshold for coins and currency received in nonfinancial trades or businesses from $10,000 to $30,000, also with CPI-based updates every 5 years. The Act requires federal agencies and the Secretary of the Treasury to revise regulations to reflect these changes, which must be implemented within 180 days of enactment.
Cash Transactions Get More Leeway: New Bill Raises Reporting Threshold to $30,000
The "Financial Reporting Threshold Modernization Act" is shaking up how cash transactions are monitored, and it's a mixed bag for regular folks and businesses alike. Here’s the rundown:
Big Cash, Less Hassle?
This bill significantly raises the bar for when financial transactions must be reported to the government. We're talking a jump from $10,000 to $30,000 for currency transaction reports (Section 2). That means if you're buying a used car with cash, or making a big down payment, you're less likely to trigger an automatic report to the feds. The same goes for nonfinancial businesses receiving large cash payments (Section 2).
Example: Imagine a contractor who gets paid $25,000 in cash for a home renovation. Under the old rules, that would have been flagged. Now? No report required.
Suspicious Activity – Less Obvious?
The bill also bumps up the thresholds for Suspicious Activity Reports (SARs). Banks and other institutions won't have to automatically report potentially shady transactions unless they hit $10,000 (up from $5,000) or $3,000 (up from $2,000), depending on the type of institution (Section 2). This could mean fewer investigations into potentially illegal activities.
Money Services Get a Break
Even small money service businesses (think check-cashing places or currency exchanges) get a higher threshold – $3,000 instead of $1,000 – before certain rules kick in (Section 2). This could mean less paperwork for them, but also potentially less oversight.
The Inflation Factor
One arguably good thing: these thresholds will automatically adjust every five years to keep up with inflation (Section 2). This prevents the reporting requirements from becoming too burdensome over time just because of rising prices.
The Catch: 180 Days
All these changes are supposed to happen fast – within 180 days of the bill becoming law (Section 2). This could be a scramble for banks and businesses to update their systems.
The Bottom Line
While this bill might seem like a win for privacy and reducing red tape, it also raises some serious questions. Will it make it easier for illegal activities to fly under the radar? Will the reduced reporting outweigh any benefits from decreased compliance costs? It’s a trade-off, and one that could have real consequences for how money moves around in our economy.