SpiritBank
May 3, 2005
Mr. Robert E.
Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
Re: “EGRPRA burden
reduction comment”
Dear Sir,
I am the Compliance
Officer of SpiritBank with assets of $679 million, which
includes our Holding Company. Our Head Office is located
in Tulsa, Oklahoma. As a community banker, I would first
like to thank the FDIC, for their continued efforts and
positive approach to the EGRPRA - Economic Growth and
Regulatory Paperwork Reduction Act of 1996.
This letter
addresses my concerns and recommendations relating to
requirements that I believe are outdated, unnecessary or
unduly burdensome in regard to BSA – Bank Secrecy Act
and Anti -Money Laundering laws in relation to Safety
and Soundness.
CTR – Raise the
threshold for reporting
Increase the value
of a CTR – Currency transaction report by raising the
threshold to a level in line with inflation adjusted
transaction activity. The $10,000.00 threshold is
approximately 35 years old. Consider a threshold of
$20,000.00 to $25,000.00, as suggested to FINCEN, in
Februrary 2005, by the ABA – American Bankers
Association. The annual filing of CTR’s, which exceeds
10 million a year cannot be reviewed by law enforcement
on local or national levels. Law enforcement must rely
on other indicators or information, including SAR’s,
314A and OFAC reports to prioritize their
investigations.
The increase in the
CTR reporting threshold would allow law enforcement,
financial institutions and their employees to spend more
time monitoring for “suspicious activity”. And would
also reduce the amount of time that regulators and
financial institutions spend on correcting technical
mistakes on CTR’s that will not be utilized in an
investigation.
CTR
Exemptions – Biennial renewal for Phase II
The law should be
changed to require that mandatory paper work be
completed and filed, only if an entity should be removed
from an exempt status based on the biennial review
findings. Exempt accounts are still subject to
suspicious activity review and filing of a SAR report,
if engaged in suspicious activity.
SAR’s –
Suspicious Activity Reports
Identify, if any,
activity that law enforcement asserts no interest, so no
need for repetitive filing of SAR’s is discontinued.
Example: Nigerian Scam, a bank employee or customer
receives a fax, letter or email stating that if they
provide their account information the sender will share
a large amount of money with them. This scam and similar
variations has been in existence for over 20 years and
has evolved from letters and phone calls to fax and
email as technology has advanced.
Also, establish
guidelines when repetitive filings are not required on
the same customer when an original report has been filed
and similar activity is continued.
Regulatory
Confusion
The regulatory
confusion in relation to MSB’s has been very time
consuming and burdensome for the Banking Industry. The
Federal Agencies should all be in agreement, before
publishing and enforcing agency guidelines, exam
procedures and Q & A’s concerning anti-money laundering
laws, including issues related to MSB’s - Money Service
Businesses. The threat of zero tolerance that is implied
only adds to the frustration of Bankers who are doing
there best to comply.
As a Community
Banker, I am aware that legitimate MSB’s as
non-traditional banking entities offer a needed service
to people that have come from backgrounds where they
have not used the services of traditional types of
financial institutions, such as banks. And although I do
not have the statistics, MSB’s must account for a large
volume of money movement that has an impact on the
economy on a local and national level.
The confusion and
excessive regulation has been cause for our Bank to
curtail our activities with MSB’s.
In conclusion, I
believe that the FDIC and other federal agencies will
make major improvements to the Anti-money laundering
laws through their continued efforts to reduce
regulatory burden and confusion. And I urge the FDIC to
take into consideration the recommendations offered in
this letter.
Sincerely,
Pat Hooks
Vice President of Compliance
SpiritBank
Tulsa, Oklahoma
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