WASHINGTON — The Treasury Department is considering raising longstanding thresholds for Suspicious Activity Reports and Currency Transaction Reports while potentially giving financial institutions credit based on how long they have known their customers, Treasury Secretary Scott Bessent told lawmakers Tuesday.
Bessent outlined the potential changes during testimony before the House Financial Services Committee as lawmakers questioned him about Bank Secrecy Act and anti-money laundering requirements, stablecoins, cybersecurity and other financial system issues.
Committee Chairman French Hill (R-AR) asked Bessent about updating SAR and CTR thresholds, noting that the reporting levels were established decades ago and saying a Treasury report to Congress on possible changes was five years overdue.
“We believe that we must get this right,” Bessent said.
He said Treasury is considering “a combination of potentially raising the thresholds and also giving credit to institutions for the duration that they have known their clients.”
Bessent said Treasury was “in the midst of this” and specifically cited the compliance burden on small and community banks. He said the department wants to avoid imposing unnecessary costs on those institutions while maintaining the safety and soundness of the financial system.
Bessent: Treasury ‘Actively Working’ on Changes
Bessent returned to the issue when Rep. Mike Flood (R-NE) asked whether Treasury could raise SAR and CTR thresholds under anti-money laundering rules for community banks.
“On AML/BSA thresholds, we are actively working on threshold increases based on customer tenure to relieve community bank burdens,” Bessent said.
Bessent did not specify what the new thresholds might be or provide a timetable for making changes.
The existing thresholds have increasingly drawn criticism from financial institutions, including credit unions, and lawmakers who argue inflation and growth in transaction volumes have resulted in large numbers of reports while increasing compliance costs.
In a June letter to the Financial Crimes Enforcement Network, House Financial Services Committee members noted that approximately 21.5 million CTRs were filed in 2025 and cited a Government Accountability Office finding that law enforcement accessed only 5.4% of CTRs.
Stablecoins, Bank Deposits Also Discussed
Stablecoins and their potential effect on traditional financial institution deposits also surfaced during the hearing.
Rep. Brad Sherman (D-CA) questioned Bessent about whether interest or other returns associated with stablecoins could draw deposits away from banks.
Sherman argued that declining deposits could leave banks with less funding available for small-business lending and potentially affect Community Reinvestment Act activity.
He also questioned Bessent about know-your-customer requirements and accountability in decentralized finance and stablecoin arrangements, including how illicit-finance rules could be enforced when responsibility is distributed among multiple participants.
Bessent pointed to digital-asset legislation pending in Congress.
“That’s why I’m pushing the passage of the CLARITY Act, because it gives Treasury more authority,” Bessent said.
The CLARITY Act ultimately became stalled in the Senate on Tuesday.
Sherman disagreed with that approach.
“The CLARITY Act emboldens and makes more popular the rival to the U.S. dollar, which is crypto,” Sherman said. “It’s as if America owns Coke and your suggestion is, ‘Let’s invest and glorify Pepsi.’”
Flood later asked Bessent how dollar-backed stablecoins authorized under the GENIUS Act could strengthen the dollar.
“Dollar-backed stablecoins increase demand for U.S. Treasury bills and reinforce the dollar,” Bessent said.
Cybersecurity and AI
Rep. Bill Huizenga (R-MI) also questioned Bessent about Treasury’s work involving artificial intelligence, cybersecurity and technology risks within the financial system.
Bessent said Treasury began its work with the financial services sector and has been coordinating with other parts of the federal government for more than six months.
Treasury also has met with large banks to discuss cybersecurity and resilience, he said.
“The largest banks have very good cybersecurity resilience and they have been very helpful in terms of creating more resilience,” Bessent said.
The exchanges came during Bessent’s annual appearance before the House Financial Services Committee for its hearing on “The Annual Testimony of the Secretary of the Treasury on the State of the International Financial System.”
