What Is a 314(b) Request and How Is It Used?
Learn how financial institutions use a protected information-sharing mechanism to counter money laundering and terrorism financing.
Financial crime, including money laundering and terrorist financing, threatens global economic stability. These illicit operations span multiple jurisdictions and financial institutions, making detection and prevention complex. Effective information sharing among entities is crucial for identifying and disrupting these schemes. This collaboration helps financial institutions safeguard the financial system.
Understanding 314(b) Information Sharing
A 314(b) request is a voluntary information-sharing mechanism among U.S. financial institutions. Its objective is to facilitate the identification and reporting of activities that may involve money laundering or terrorist financing.
The legal foundation for this information sharing is Section 314(b) of the USA PATRIOT Act. This section grants a “safe harbor” from liability to financial institutions that share information in good faith, provided they adhere to specific conditions. This protection encourages cooperation among institutions without fear of violating privacy laws.
Participation in this program is not mandatory, but the Financial Crimes Enforcement Network (FinCEN) encourages it to strengthen anti-money laundering (AML) and counter-terrorist financing (CTF) efforts. This voluntary framework allows institutions to collectively build a comprehensive understanding of suspicious financial activities. Sharing insights can uncover patterns not evident to a single institution.
Who Can Share and What Information is Covered
A diverse range of financial institutions is eligible to participate in 314(b) information sharing. This includes:
- Banks
- Credit unions
- Broker-dealers
- Money services businesses
- Casinos
- Mutual funds
- Futures commission merchants
- Introducing brokers in commodities
- Insurance companies
- Loan and finance companies
- Operators of credit card systems
Associations of financial institutions can also participate. The scope of information exchanged under 314(b) is specific to suspected money laundering or terrorist financing activities. This includes customer account details, transactional data, and other relevant identifying information.
Shared data may include account numbers, transaction dates and types, Social Security numbers, taxpayer identification numbers, passport numbers, dates of birth, and addresses. The shared information must directly relate to potential illicit activity, such as transactions involving the proceeds of specified unlawful activities (SUAs). The program helps institutions identify and report suspicious activities to FinCEN.
Requesting and Providing Information
Before initiating or responding to a request, a financial institution must register its intent to participate with FinCEN. This registration typically occurs through FinCEN’s Secure Information Sharing System (SISS), which has recently migrated to the Financial Institution (FI) Portal.
Once registered, a financial institution can submit a 314(b) request to another participating institution when it suspects potential money laundering or terrorist financing. The requesting institution reviews its internal records and formulates a clear, specific request. This request should detail the nature of the suspected activity and the specific information sought.
Upon receiving a 314(b) request, the recipient institution reviews its records for relevant information that aligns with the inquiry. Information exchange should occur through secure communication channels, such as the FinCEN FI Portal or other secure messaging systems, to protect sensitive data. Timely communication is encouraged.
Protecting Shared Information and Meeting Requirements
Information shared under the 314(b) program is subject to strict confidentiality provisions. This information is for internal use by participating financial institutions to assist in identifying and reporting suspicious activities. It cannot be used for purposes unrelated to anti-money laundering or counter-terrorist financing efforts, nor can it be directly disclosed to law enforcement through this mechanism.
Financial institutions must maintain adequate procedures to protect the security and confidentiality of all information received. Compliance with existing privacy regulations, such as the Gramm-Leach-Bliley Act (GLBA), is sufficient to meet these protection requirements.
Ongoing compliance obligations apply to financial institutions participating in 314(b). This includes annually renewing registration with FinCEN and maintaining a robust anti-money laundering program. Institutions must also establish clear internal policies and procedures for handling 314(b) requests, designate points of contact for receiving and providing information, and keep detailed records of all shared information.