What is the primary purpose of the Bank Secrecy Act (BSA)?

The primary purpose of the Bank Secrecy Act (BSA) is to prevent and detect money laundering and other financial crimes. The BSA, enacted in 1970, mandates that financial institutions take certain steps to help the government identify and combat illegal activities such as money laundering and terrorist financing. This is accomplished through requirements such as reporting large cash transactions, filing suspicious activity reports (SARs), and maintaining certain records that could be useful for federal law enforcement.

By focusing on these preventative measures, the BSA plays a crucial role in promoting financial transparency and integrity within the banking system. Financial institutions are required to implement Anti-Money Laundering (AML) programs and conduct customer due diligence to mitigate the risk of being used for illicit purposes. This framework is essential to maintaining the trust and security of the financial system, making the correct answer clear in the context of the BSA's objectives.