FinCEN's new 314(b) guidance: Progress, but the real problem remains unsolved

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) just reissued its Section 314(b) Fact Sheet on June 12, 2026. For those unfamiliar, Section 314(b) is FinCEN's voluntary information-sharing safe harbor under the USA PATRIOT Act. It allows financial institutions to share information with one another when they suspect activity may involve money laundering or related financial crimes.

First, I want to start by giving credit where it is due. This is a good step forward.

The new guidance does real work. It makes clear that financial institutions can share information in real time. It spells out how fraud and consumer scams are fair game for information sharing because fraud offenses are specified unlawful activities for money laundering. And it confirms that institutions can share information even when the sending institution has no reason to believe it relates to a specific customer or account at the receiving institution.

These are meaningful clarifications. For years, compliance teams have sat on information they could have legally shared because the guidance was murky and their lawyers told them to play it safe. This fact sheet removes some of that hesitation.

So yes, this is progress. But let us be honest about what it does not do.

The participation problem is still the elephant in the room

Section 314(b) has been voluntary since the day it was created, and after more than two decades, the numbers are hard to ignore.

Roughly 7,200 financial institutions are registered. Measured against the full universe of eligible institutions, which runs well into the tens of thousands once you count every bank, credit union, broker dealer, casino, and money services business, that is an overall participation rate of about 12.3%. One in eight.

Even that figure masks how lopsided participation really is. Banks, credit unions, and broker dealers participate at rates north of 40%. Money services businesses, by contrast, participate at a rate of about 2%. That matters because these companies — including money transmitters, payment providers, and other firms that move funds quickly — often sit closest to fraud schemes and money mule networks. Yet they are largely absent from the information-sharing system.

A clearer fact sheet does not change that math.

You can write the cleanest, most permissive guidance in the world, but if institutions have no compelling reason to act on it, most of them will not. Compliance leaders are not sitting around waiting for permission slips. They are sitting around staring at budgets, competing priorities, and a long list of mandatory obligations that come with examiners and penalties attached. Section 314(b) is none of those things.

It is voluntary, it costs money and staff time to do well, and the benefits are diffuse and hard to put on a scorecard. That is the definition of a program that good intentions alone will not grow.

We need incentives, not just encouragement

While the fact sheet “strongly encourages” institutions to participate, encouragement is not an incentive. If FinCEN and Treasury are serious about meaningful participation, and I believe they should be, then they need to give institutions a concrete reason to lean in.

There are real options here. Give participating institutions examination or safe harbor credit that actually matters when an examiner walks in the door. Build 314(b) collaboration into how suspicious activity report (SAR) quality and program effectiveness are measured, so the work counts for something. If an institution spends time and resources helping other institutions identify criminal activity, regulators should recognize that contribution when evaluating the effectiveness of its compliance program.

The exact mechanism is a policy choice. The principle is not. You get the behavior you reward, and right now, we reward nothing.

The technology is not the constraint anymore

Here is what frustrates me most: We are well past the point where technology is the bottleneck. Scalable, secure, real-time information sharing exists today. The platforms exist. The technology already exists to let institutions compare information securely without exposing customer data. The capacity exists. The infrastructure exists. Institutions already move enormous volumes of data securely every second of every day.

What we lack is not capability. What we lack is collective will. The plumbing is sitting there, and we keep treating an infrastructure problem like it’s a guidance problem. A fact sheet cannot manufacture the will to build and connect at scale. Only incentives and leadership can do that.

And while we are at it, 314(a) is overdue for a real modernization

If 314(b) is how financial institutions share information with one another, 314(a) is how law enforcement asks the industry whether anyone has seen a particular person, account, or organization. It is one of the government's primary tools for quickly gathering financial intelligence across the regulated financial sector. And it is showing its age badly.

It has not been meaningfully updated in a generation. FinCEN still distributes 314(a) requests in biweekly batches. Because of that structure, it can take up to 28 days for a request to make its way through the cycle and come back around. In an era where fraud rings can spin up and cash out in hours, a four-week loop is not a tool. It is a memorial to how we used to do things.

The lag is only part of the problem. The system is also loaded with false positives that bury analysts in noise and waste the time of the very people we are asking to find the signal.

This is not a hypothetical complaint. As part of a government funded study, I interviewed roughly a dozen banks about modernizing 314(a), and they supported it. The major law enforcement stakeholders wanted it too. The Federal Bureau of Investigation (FBI) wanted it. The Secret Service wanted it. IRS Criminal Investigation, Homeland Security Investigations, and the Drug Enforcement Administration (DEA) all wanted it. Treasury indicated it would fund the modernization.

The pieces were lined up. The industry was willing, law enforcement was asking for it, and the money was on the table. And FinCEN still said no.

I do not understand that decision, and I do not think the public has been given a good reason for it. When the operators, investigators, and funders all agree that a generation-old system needs to be brought into the present, “no” is not a neutral answer. It is a choice to preserve an outdated, slow, and noisy process while criminals move at the speed of the modern payments system.

The bottom line

The new 314(b) Fact Sheet is genuinely useful, and I am glad FinCEN issued it. Clarity matters and this is real clarity. But clarity is the easy part.

The hard part is participation, and participation will not move until institutions have a reason that goes beyond a strongly worded encouragement. Pair the guidance with real incentives. Use the technology we already have. And stop slow-walking the modernization of 314(a) when everyone who touches the system, on both sides of it, is asking for it and the funding is available.

We have the tools. We have the willing partners. What we need now is the will to use them.

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Key takeaways:

The new 314(b) fact sheet is a positive step, but it does not solve the real problem. The guidance provides useful clarity around information sharing, yet participation remains low. More than two decades after 314(b) was created, only about 12 percent of eligible institutions participate, and participation among money services businesses is closer to 2 percent.
Voluntary programs need incentives. Strong encouragement alone is unlikely to change participation rates. If regulators want broader adoption, institutions need tangible benefits for contributing to information sharing.
Technology is no longer the bottleneck. The infrastructure for secure, privacy-preserving, real-time information sharing already exists. The remaining challenge is creating the incentives and leadership necessary to drive adoption at scale.
314(a) modernization remains overdue. A system built around biweekly request cycles is poorly matched to modern fraud activity that unfolds in hours. Industry participants, law enforcement agencies and Treasury have all supported modernization, yet progress has stalled.