The Florida International Bankers Association appreciates the opportunity to respond to the EGRPRA request for burden reduction in BSA  from the perspective of Florida banks conducting international business.

The Florida International Bankers Association (FIBA) is a non profit association of 70 foreign and domestic banks conducting international business in Florida, primarily with Latin America.  Membership includes foreign bank agencies, wholesale branches, representative offices, and the international departments of domestic banks regulated by the FDIC, the State of Florida, the OCC and the Federal Reserve.

The primary business activities of our members are international activities, either correspondent banking or private banking, thus falling into the "high risk"  category requiring enhanced due diligence and monitoring.   

FIBA member banks have been recognized for more than 20 years for their cooperation with regulators and law enforcement and for their leadership in implementing anti money laundering measures in their institutions.

International business is a critical industry for Florida.  At year end 1999, a comprehensive economic impact study of foreign and domestic financial institutions conducting international business  in Florida showed an economic benefit to the state of Florida of more than $3 billion.  The study was done by FIU - Florida International University.   As of June 30, 2004, 27 foreign bank agencies in Florida showed total assets of more than $17 billion, according to figures from the State of Florida Bureau of Bank Regulation.

BSA compliance, as expanded under the USA Patriot Act,  has required all banks, including those with international operations,  to invest in additional staff, purchase more software, and increase their budgets in order to comply.   Banks, regulators and Congress have a common goal : to prevent terrorist financing and money laundering through the financial system. 

FIBA would like to echo the opinions expressed by the American Bankers Association. The ABA documented the number of hours spent on BSA compliance.  We also echo the comments by the Florida Bankers Association.  Banks are spending millions of dollars but "the burden imposed has not led to increased security commensurate with the increased burden on financial institutions". 

As an international association, FIBA would also like to note that the regulatory burden has resulted in some legitimate international business being pushed out of banks in Florida as  the only effective means to mitigate their BSA risk. This has been well documented in the recent example of the MSB's, many of whom can no longer get bank accounts in the United States because of the perceived regulatory risk to the bank.
Banks today compete locally, nationally, and internationally for corporate and individual customers.  FIBA's members do business primarily with Latin America.  Banks with international transactions report that regulatory disparities still continue to be widespread among regulatory agencies and across geographic locations. Interntional transactions or international customers which may be acceptable at one institution can be cited by regulators at another institution.

Banks with international transactions need clear guidance, which must be provided to both banks and examiners.  Banks with international transactions are told at each BSA examination that they are "not doing enough", but there is no research or empirical studies showing that doing "more" will result in any improvement.

Corresondent banking relationships between banks in the US and banks in Latin America are also being reduced or eliminated.  The correspondent banking relationship goes to the heart of the bank-to-bank relationships in our hemisphere.  In most cases, the banks in Florida, both large and small, have had relationships with their correspondents in Latin America for many years and they know them and their business.     

At a time when the economy is becoming more and more global, US banks in Florida may feel pushed to do primarily domestic banking business,  opening new opportunities for banks in Europe or Asia.

The generalized perception of small and mid size financial institutions who are members of FIBA, and who have been conducting international business for many years,  is that regulators have now adopted an unstated policy that only large financial institutions should be doing international banking business.  
Again, we appreciate the opportunity to comment on the BSA regulatory burden from the perspective of banks conducting interntional business in Florida.  The Florida International Bankers Association (FIBA) would be happy to participate in any further discussions on these issues.
Respectfully submitted,

Patricia Roth
Executive Director
Florida International Bankers Assoc (FIBA), Inc.
80 S.W. 8th Street, # 2505
Miami, Florida 33130