Bank Secrecy Act – CTRs and SARs
Participants stated that the examination process for the Bank Secrecy Act
has become too complex, while several others stated the amount of time and expense
needed to comply with the Bank Secrecy Act and monitor OFAC related issues has
increased exorbitantly.
Participants expressed frustration with the amount of time and money
expended to file Suspicious Activity or Currency Transaction Reports, particularly
when it appears that law enforcement is not interested in pursuing the matter.
The participants recommended that the amount of information required in
filing Suspicious Activity or Currency Transaction Reports be reduced
to the individual’s name, address, social security or tax identification number,
and a brief overview describing the activities being reported. Thereafter,
more comprehensive information can be provided law enforcement or
regulatory parties when/if requested.
Participants recommended that the threshold for filing a Currency
Transaction report be increased.
Call Reports
Participants stated that the Call Report is too lengthy, and that even
with the increased volume of information submitted, the time examiners
spend on examinations has not been materially reduced.
Community Reinvestment Act (CRA) Regulations
Participants stated they concur with the suggestion to repeal the Sunshine
Provision of the CRA.
A participant stated that the Community Development Loan definition is
too narrow. The participant also stated that although the
CRA promotes community development lending, regulatory safety and soundness
guidelines often appear to discourage this type of activity.
Equal Credit Opportunity Act – Regulation B
Participants expressed frustration with comprehending the requirements of Reg B,
particularly in regard to providing joint credit.
Examinations – General
Participants suggested that the regulators should use the findings
of the safety and soundness examinations to determine the need for,
and scope of, specialty area examinations.
Home Mortgage Disclosure Act (HMDA) – Regulation C
Participants questioned the need for the various documents and
disclosures required at the closing of a mortgage loan, with one suggesting
that the guidelines be reduced to simply requiring adherence to
State laws. The participants also questioned the need for providing so much
information, since large portions are never reviewed by regulatory officials, and
other than the affixation of signatures, are of little practical utility
for loan customers.
A participant suggested that the HMDA exemptions should be
changed, and should be based on a combination of a bank’s size,
and the number and dollar volume of home loans made during
a given period.
Level Playing Field
Participants suggested that cost/benefit analysis should be conducted of
all existing and proposed regulations, including a review of the potential
disadvantages to banks as compared to nonbank competitors.
A participant stated that the compliance burden for banks is significantly,
and unfairly, greater than for nonbanks, such as mortgage brokers.
Participants suggested that credit unions should be taxed, and
required to comply with the same consumer laws and regulations as
banks and thrifts. Otherwise, the participants recommended that
banks and thrifts be accorded tax exempt status, and that large
portions of the consumer regulations should be
repealed.
Limitations on Transfers from Money Market Deposit Accounts – Regulation D
Participants suggested that the money market account transaction limits
are outdated and should be repealed. Several participants also stated that
regulations restricting the payment of interest on demand deposits should be
repealed.
Miscellaneous
A participant suggested that the regulators identify some type of measurement
for determining the success or failure of the EGRPRA project. It was
also recommended that the regulators do their part in “cheerleading” before
Congress for the proposals which are considered important to the industry.
A participant suggested that the regulators hold more meetings with
bankers to discuss regulatory and legislative issues important to the industry.
Privacy Notices – Gramm-Leach-Bliley Act
Participants stated that the required annual privacy notice disclosures
are burdensome, are not utilized by consumers, and are considered a
waste of money.
Real Estate Appraisal Requirements – FIRREA
Participants suggested that the appraisal regulations under Part 323 be
revised to adjust the limitations, relative to acquiring appraisals, to
higher levels to account for inflation and increased real estate costs which
have occurred since FIRREA was originally adopted. One participant also
questioned the need for appraisals when the transactions are between a
bank and a governmental sponsored entity (GSE).
Regulations/Legislation Plain English, Agency Cooperation
A participant suggested that all consumer-oriented regulations be “tested” to
determine if they truly benefit consumers, and also that congress should
consider tax credits to help pay for the burden of compliance.
A participant stated that it appears that the main emphasis for the consumer
regulations is to satisfy advocacy groups, as opposed to providing useful
information to consumers.
Participants suggested that a number of the consumer regulations, such
as the right-of-rescission and HMDA, were originally based on identified needs
to protect consumers. However, due to competition in the marketplace,
the regulations are no longer considered to have utility and should be
rescinded.
Participants stated that the RESPA, HMDA, and Truth-in-Lending regulations
are too complex, and the provisions are often enforced inconsistently
among the regulators.
A participant suggested that the regulators should try to make their
publications, such as Financial Institutions Letters, more concise and descriptive,
so that readers can immediately determine if the guidance or
recommendations applies to their bank.
Sarbanes-Oxley Act
Participants voiced that the cost and burden for compliance with
Sarbanes-Oxley is extraordinarily high, with little direct value being
derived.
Simplified Disclosure Forms
A participant suggested that since there are usually no significant
differences, banks should only be required to provide mortgage loan
customers either the good faith estimate or the HUD-1 form prior to closing.
Index Thresholds in Regulations
Participants suggested that the regulators needed to adopt a risk-based
or two-tiered examination approach, based on a bank’s size and the
complexity of its operations.
Truth-in-Lending – Reg Z and RESPA
Participants stated that calculations and required documentation
for compliance with TILA is too complex, and that the information
provided to consumers is of little value in comparing
costs of credit.
Truth-in-Lending and the Right of Rescission
Participants suggested that the right of rescission should be eliminated, or
at the least, modified to allow consumers to waive the right.
USA PATRIOT Act and “Know Your Customer” Requirements
A participant stated that it appears that the information required to
comply with the customer identification provisions of the PATRIOT
Act may conflict with certain items which, pursuant to Reg B,
cannot be collected on customers.
Participants stated that the “know-your-customer” provisions of the
PATRIOT Act are somewhat burdensome when dealing with long-term customers. One
participant also suggested that the customer identification procedures included in the
PATRIOT Act can have the effect of extending the time frame for opening
accounts, which in turn costs more money.
A participant stated that BSA/FinCEN customer identification requirements
discourage banks from serving noncustomers, which is contrary to CRA’s
mandate for trying to serve the entire community.
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