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Statement of Mel Martinez
U.S. Senate Committee on Banking, Housing, and Urban Affairs
"Consideration of Regulatory Relief Proposals"
March 01, 2006
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Good morning. Thank you, Chairman
Shelby for holding this hearing. I also want to commend Senator Crapo and his
staff for their excellent and thorough work throughout this regulatory relief
legislative process. You have shown strong leadership and command of these
issues and I know the Florida Bankers appreciate your efforts – as do I.
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I will keep my comments brief since we’ve fully vetted these issues several
times before this Committee, but I want to express for the record how important
the provisions related to the Bank Secrecy Act are to the bankers in my state.
When the BSA was passed in 1970, terrorism was something very different than
it is today. It is crucial to aggressively prevent and investigate terrorist
financing and Congress’ intention to track terrorists’ money trails by requiring
financial institutions to submit Currency Transactions Reports and Suspicious
Activity Reports was well intended. However, we may not be obtaining the
information Congress originally sought through CTRs – or with the frequency and
duplicity that they are filed.
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We have heard from previous witnesses in this Committee that CTRs can be a
very useful tool to identify and locate criminals and terrorists, but that many
of the CTRs filed by financial institutions are of little relevance in
investigating financial crime. Because of this and the fact that compliance
with the BSA tends to be the most expensive regulatory burden on community
banks, I believe changes are needed.
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Legislative changes including increasing the threshold for filing a CTR and
adjusting it for inflation, allowing banks filing fewer than 50 CTRs a month to
file quarterly, and allowing banks to exempt “seasoned customers” would all make
a tremendous difference in the daily operations of Florida bankers – and I
believe would not take away from our constant effort to deter and intercept
terrorist activities.
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From the time I hit the campaign trail to the meeting I had with Florida
bankers last month, the examples of the burdens of the BSA are alarming. One
example that stands out is from Eagle National Bank in Miami which has been around
since 1957 and currently holds around $300 million in assets. It files
approximately 30 CTRs each month, the majority of which are for its largest cash
customer – the Salvation Army.
Because the Salvation Army operates on a cash basis, Eagle National Bank
provides the necessary banking services it needs to run its Miami locations. The
Salvation Army has been one of Eagle National’s customers for years, but they
still have to file a CTR each time it conducts $10,000 worth of banking
transactions on any given day.
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There is no doubt that Florida bankers are doing their part to alert
law enforcement and regulators of suspicious banking activity that occurs in
their banks. If we can help them by relieving some of the excessive regulatory
burdens that we are finding are not producing the results Congress was seeking,
this is our opportunity and it is our responsibility to do so. Again, I want to
thank Senator Crapo for his dedication to this effort and I look forward to
hearing from our witnesses.
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