The Streamlining Transaction Reporting and Ensuring Anti-Money Laundering Improvements for a New Era Act (STREAMLINE Act), introduced by Senators Tim Scott (R-SC) and John Kennedy (R-LA), is a much-needed modernization of the Bank Secrecy Act (BSA). It situates the specifics of the bill within the larger debate over regulatory overreach and economic efficiency, arguing that reform will allow the banking industry to serve consumers more effectively while maintaining robust anti-money-laundering protections.
The Bank Secrecy Act of 1970 remains the cornerstone of U.S. financial-crime prevention, requiring banks to file Currency Transaction Reports (CTRs) and Suspicious Activity Reports (SARs) with the Department of the Treasury. Yet over the past five decades, technological and economic transformation has far outpaced the BSA’s static compliance thresholds. The law’s rigidity has imposed mounting costs on banks and consumers alike, creating an environment where compliance has become synonymous with overregulation rather than effectiveness.
Recognizing this imbalance, Senator Tim Scott and Senator John Kennedy introduced the STREAMLINE Act in October 2025 to modernize the BSA’s outdated requirements and restore proportionality to financial oversight.The proposed reform seeks to reduce unnecessary paperwork, recalibrate reporting thresholds, and ensure that regulation targets genuinely suspicious activity.
The Burden of Regulatory Overreach
Under current law, banks must file CTRs for all cash transactions exceeding $10,000 and SARs for potentially suspicious transactions exceeding as little as $2,000. These thresholds have not been adjusted since 1970, even as inflation has eroded the real value of money by nearly 80 percent. Consequently, banks are required to file millions of reports annually—many of which concern ordinary, low-risk consumer activity.
Community banks and credit unions, which lack the economies of scale enjoyed by major national institutions, experience this burden most acutely. Compliance requires expensive monitoring systems, dedicated staff, and extensive legal oversight. Surveys indicate that 63 percent of U.S. banks cite BSA/anti-money laundering compliance as their top regulatory concern. As a result, financial institutions often divert resources from lending, digital modernization, and community outreach toward fulfilling administrative mandates that do little to advance law-enforcement objectives.
This dynamic imposes real costs on consumers. When compliance becomes disproportionately expensive, banks must raise fees, curtail services, or avoid higher-risk segments of the population—such as small businesses and lower-income borrowers. As Senator Scott noted, “outdated regulations drown our financial institutions in burdensome paperwork, reducing their ability to serve customers.”
The STREAMLINE Act: Key Provisions
The STREAMLINE Act proposes to raise the CTR threshold from $10,000 to $30,000 and the SAR thresholds from $2,000 to $3,000 and from $5,000 to $10,000, depending on transaction type. It also mandates that the Treasury Department review and adjust these figures every five years to account for inflation.
By modernizing these thresholds, the bill aims to reallocate compliance resources toward meaningful risk identification rather than rote reporting. It replaces a volume-based approach with a risk-based model emphasizing precision, technology, and inter-agency collaboration. Senator Kennedy summarized the rationale succinctly: “The STREAMLINE Act cuts red tape so law enforcement can focus on real criminals—not hardworking Americans making routine transactions.”
The proposal has received broad support from industry organizations such as the American Bankers Association, America’s Credit Unions, and the Independent Community Bankers of America.These stakeholders contend that reform will enhance efficiency without compromising national security.
Economic and Consumer Implications
From an economic standpoint, regulatory modernization aligns with basic principles of efficiency and competitive balance. Excessive compliance costs ultimately reduce profitability, suppress lending, and stifle innovation. By updating thresholds, the STREAMLINE Act could free capital for productive uses, encouraging banks to expand access to credit, develop new consumer products, and invest in digital infrastructure.
Small and mid-sized institutions stand to benefit most. Over the past decade, rising compliance costs have accelerated consolidation, as smaller banks merge with larger firms to survive the regulatory burden. Easing that pressure may help preserve local banks’ independence and the personalized service they offer communities.
Consumers likewise gain from modernization. Lower administrative costs can translate into lower fees, improved customer service, and increased access to affordable credit. The reform does not dismantle anti-money laundering oversight but rather strengthens it by allowing compliance officers to focus on genuinely suspicious or high-risk transactions. As financial regulators themselves have acknowledged, quality—not quantity—of data drives effective enforcement.
Balancing Efficiency and Security
Critics argue that higher thresholds might reduce the quantity of data available to investigators. However, the empirical record suggests that most CTRs and SARs filed under current standards yield little investigative value. The Financial Crimes Enforcement Network (FinCEN) has long expressed concern that “volume alone cannot substitute for targeted intelligence.”
By reducing unnecessary filings, banks can dedicate more attention to sophisticated detection methods—machine learning, behavioral analytics, and risk-scoring models—that enhance law-enforcement cooperation. Far from undermining law enforcement’s efforts, the STREAMLINE Act could actually make them more effective by reducing irrelevant data and sharpening financial intelligence.
Thus, the bill exemplifies a balanced approach: maintaining vigilance against illicit finance while recognizing the economic and operational realities of twenty-first-century banking.
Conclusion
Senator Tim Scott’s STREAMLINE Act represents a pivotal step toward recalibrating the balance between regulatory oversight and economic efficiency. The measure acknowledges that financial regulation must evolve alongside technology, inflation, and market complexity. Rather than a retreat from responsibility, modernization constitutes an affirmation that effective regulation should be dynamic, risk-based, and proportionate.
For the banking industry, reform promises relief from outdated constraints that hamper innovation and service delivery. For consumers, it promises a more responsive, accessible, and affordable banking system. And, for policymakers, it offers a pragmatic model of governance that upholds the twin imperatives of integrity and efficiency.
If enacted, the STREAMLINE Act could mark the beginning of a broader transformation—one that restores coherence and common sense to financial regulation while reinforcing America’s commitment to both security and economic opportunity.
