FinCEN, Fed Withdraw $250 Cross-Border Travel Rule Proposal

The Financial Crimes Enforcement Network (FinCEN) and the Federal Reserve made their withdrawal of a proposed $250 cross-border transfer threshold effective Monday, leaving the $3,000 cutoff for recordkeeping and information-sharing rules in place.

The 2020 plan would have required banks and nonbank financial institutions to collect and retain information on more transfers that begin or end outside the United States. It also would have lowered the threshold for passing transfer information to other institutions in the payment chain.

The proposal also sought to specify that the rules cover transactions involving convertible virtual currency and digital assets that have legal tender status for the recipient. Withdrawing that proposed wording does not change the existing Travel Rule.

The agencies received nearly 3,000 comments. Many opposed the lower threshold, arguing that it would increase compliance costs, particularly for smaller institutions, and could push remittances toward less regulated channels. Views on the crypto wording were mixed.

FinCEN and the Fed cited the time since the proposal was issued and changes in crypto markets and law. They will not finalize the 2020 proposal. Any similar rule change would require another opportunity for public comment.