FinCEN and Fed Drop Plan to Cut Cross-Border Travel Rule Threshold to $250

The US Financial Crimes Enforcement Network (FinCEN) and Federal Reserve Board have withdrawn a proposal to lower the threshold for cross-border transfer recordkeeping and information-sharing requirements from $3,000 to $250. The withdrawal takes effect on November 9, leaving the existing thresholds unchanged.

The 2020 proposal would have required banks and nonbank financial institutions to collect and retain information on transfers beginning or ending outside the US at the lower threshold. FinCEN also proposed cutting the threshold for its Travel Rule, which requires information to pass between financial institutions in the payment chain.

The agencies said more than five years had passed since the proposal and fresh public feedback was needed. They also cited changes in virtual currency markets and emerging legal frameworks, including the GENIUS Act’s framework for payment stablecoins. No similar amendments will be finalized without another opportunity for public comment. 

Nearly 3,000 comments were submitted, most of them substantially similar form letters. Commenters generally opposed the lower threshold, citing burdens on smaller financial institutions and disruption to overseas remittances. Some warned consumers could turn to less regulated services.

The withdrawal also covers proposed wording to clarify that the rules apply to convertible virtual currencies and digital assets with legal tender status, including domestic transactions.

FinCEN’s existing 2019 guidance says convertible virtual currency transfers can fall under the Travel Rule, with transfers worth $3,000 or more potentially triggering information-sharing requirements for money transmitters.