The new guidance allows for real-time information exchange among financial institutions.
The Treasury Department on June 12 released new guidelines that enable banks to share customer information with greater ease when they suspect fraud, money laundering, terrorist financing, and other criminal activity.
The guidelines outline the circumstances under which financial institutions can exchange data in real time, while protected from liability, to improve the identification and reporting of suspected crime.
A Treasury Department fact sheet issued on June 12 says participation is voluntary but strongly encouraged.
It lists types of information that financial institutions can share, including video surveillance footage, IP addresses, and “fraud indicators like newly added payees followed by large transfers, multiple accounts with the same or similar identifying information, and login activity from geographically distant places.”
Treasury Secretary Scott Bessent stressed the need to fight fraud.
“Americans lose hundreds of billions of dollars to fraud each year,” he said in a June 12 statement. “At Treasury, we follow the money, and 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.”
The Treasury move comes after a May executive order from President Donald Trump that directed regulators to create methods for banks to examine customers’ citizenship and immigration status upon opening accounts, obtaining loans, or securing credit cards.
Banks are not required to collect citizenship information upfront, as the guidance calls upon institutions to identify suspicious patterns and report illicit activity.
Last week, Treasury’s Financial Crimes Enforcement Network (FinCEN) outlined red flags for Suspicious Activity Reports (SAR) involving non-work-authorized individuals.
“Specifically, when an Individual Taxpayer Identification Number is presented in lieu of a Social Security number or valid employment authorization document to obtain credit products or open an account, banks are encouraged to assess whether the use of an ITIN may be a relevant risk factor,” said a June 5 press release.
The newer guidance is part of a broader push to expand the use of SARs and information sharing in this area.
