314(b) Sharing

In this post, Senior Compliance Auditor Holly Wilson discusses the 314(b) sharing program.

Why Regulators Are Paying Closer Attention to 314(b)

For years, many banks and credit unions have viewed Section 314(b) as a useful but often overlooked part of their compliance program. Participation is voluntary, and for some organizations, it has remained largely dormant unless a specific investigation requires it.

That is changing.

Regulators are increasingly emphasizing information sharing among financial institutions and are paying closer attention to how financial institutions use the 314(b) framework. There are several reasons behind this shift.

A Greater Focus on Active Fraud Prevention

FinCEN has refreshed its guidance around 314(b) to reflect today’s fraud environment. Historically, banks and credit unions often used information sharing to support investigations involving past suspicious activity. Now, regulators are encouraging them to use 314(b) more proactively to help identify and stop fraud while it is still developing. This includes sharing indicators such as IP addresses, device information, account activity, and transaction patterns that may reveal coordinated fraud schemes. The goal is to help banks and credit unions detect and disrupt rapidly evolving threats before funds are moved beyond recovery.

Consistent Messaging Across Regulatory Agencies

The renewed focus is not coming from FinCEN alone. Federal banking agencies, including the FDIC, OCC, and Federal Reserve, have also encouraged greater use of information-sharing programs as part of a broader effort to combat financial crime and consumer fraud.

As a result, examiners are showing a stronger interest in how banks and credit unions participate in these networks, whether they have established procedures, how information sharing supports their broader BSA/AML and fraud-risk management programs, and whether adequate documentation exists to support regulatory reviews and audit requirements.

Concerns About Limited Participation

Despite the benefits of the program, participation levels remain relatively low across the industry. Regulators have expressed concerns that many banks and credit unions continue to operate independently when collaboration could help identify larger fraud networks or suspicious activity patterns.

Because of this, examiners may increasingly ask how banks and credit unions leverage available information-sharing tools when evaluating significant fraud events, suspicious activity trends, or account abuse investigations.

Maintaining an active 314(b) program, keeping registrations current, and following consistent documentation practices can help demonstrate to examiners and auditors that the institution is taking a proactive approach to preventing financial crime while preserving the legal protections available under the program.

How Your Bank or Credit Union Can Share Information Under Section 314(b)

Section 314(b) of the USA PATRIOT Act provides financial institutions with a legal framework for sharing information with one another to identify and report activities that may involve money laundering, terrorist financing, or certain types of fraud.

The protection offered by 314(b) is significant, but it is not automatic. Institutions must meet specific requirements to participate in the program and must follow established procedures whenever information is shared.

The process can be viewed in two phases: establishing participation in the program and following the required protocols for each information-sharing request.

Phase 1: Establishing a 314(b) Program

Before your bank or credit union can exchange information with another participant, you must complete several administrative steps.

Register with FinCEN

Your institution must notify FinCEN of its intent to participate in the 314(b) program by:

• Submitting a notice through FinCEN’s Secure Information Sharing System (SISS).
• Renewing the registration annually.
• Ensuring the registration remains active. Participation protections may not apply if your registration has expired.

Designate a Point of Contact

Your institution should appoint designated personnel, typically within the BSA/AML or compliance function, to manage 314(b) communications and requests.

These individuals serve as the official points of contact and are responsible for handling information-sharing activities in a secure and compliant manner.

Establish Policies and Procedures

Written policies should clearly address:

• Who may initiate or respond to requests.
• How information will be transmitted and stored securely.
• The review process used to determine whether activity meets the threshold for sharing.
• Documentation and record-retention requirements.

Strong internal controls help ensure that the program is used consistently and appropriately while supporting compliance audit readiness and regulatory oversight.

Phase 2: Steps Required for Each Information Exchange

The 314(b) safe harbor does not provide unrestricted authority to share information. Every information-sharing request should follow a structured review process.

Verify Eligibility → Establish Suspicion → Protect SAR Information → Share Securely → Document the Activity

Confirm the Other Institution Is Registered

Before sharing any information, verify that the receiving institution is an active 314(b) participant.

This verification can be completed through FinCEN’s participant directory within the SISS portal.

Establish a Connection to Suspicious Activity

Information sharing must relate to activities that may involve money laundering, terrorist financing, fraud, or other specified unlawful conduct.

Both completed and attempted transactions may be discussed when there is a reasonable basis for concern.

Protect SAR Confidentiality

A critical requirement of the program is maintaining Suspicious Activity Report confidentiality.

Institutions may share facts and observations related to suspicious activity, including:

• Transaction details
• Account information
• Device identifiers
• IP addresses
• Supporting evidence related to the activity

However, institutions must never disclose:

• Whether a SAR has been filed
• Whether a SAR will be filed
• Whether a SAR is being considered

Shared information should only be used for AML, fraud prevention, SAR decision-making, or related law enforcement purposes.

Use Secure Communication Methods

Sensitive information should only be transmitted through approved secure channels.

Examples include:

• Encrypted email systems
• Secure information-sharing portals
• FinCEN’s SISS platform
• Other institution-approved secure communication methods

Protecting customer and transactional data during transmission is an essential part of the process.

Maintain Detailed Records

Your bank or credit union should document each 314(b) interaction to support audits, examinations, and internal reviews.

Documentation typically includes:

• Date of the request or response
• Name of the participating institution
• Confirmation of the institution’s registration status
• Accounts, customers, or transactions involved
• Reason for the information-sharing request
• Actions taken or outcomes resulting from the exchange

Maintaining thorough records demonstrates compliance, provides examiners with a clear audit trail, and supports internal and external audit testing activities.

When used effectively, Section 314(b) enables banks and credit unions to collaborate against fraud, money laundering, and other illicit activity while operating within a well-defined legal framework. A properly managed program not only supports investigations and fraud prevention efforts but also helps institutions demonstrate a proactive approach to financial crime compliance, audit preparedness, and regulatory risk management.

Is Your 314(b) Program Ready for Increased Regulatory Scrutiny?

Banks and credit unions that actively leverage 314(b) information sharing are better positioned to identify emerging fraud threats, support compliance objectives, and maintain audit readiness. Contact us if you’d like guidance on evaluating or enhancing your 314(b) program. Our team can help you assess your current processes, strengthen documentation and controls, and prepare for regulatory examinations and audit scrutiny with greater confidence.

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