Dear Sir or Madam:
I am writing on
behalf of the Virginia Bankers Association (the VBA) to comment on
the agencies notice pursuant to the Economic Growth and Regulatory
Paperwork Reduction Act seeking suggestions on ways to reduce burden
in rules relating to money laundering, safety and soundness, and
securities. The VBA represents nearly all of the commercial banks
and thrifts (collectively banks) doing business in the
Commonwealth of Virginia. The VBA currently has 161 members. Its
membership includes many small banks serving local communities, as
well as a number of large banks with a multi-state or nationwide
presence.
The VBAs comments
relate to money laundering rules. Our banks want to do their part
to fight terrorism and prevent money laundering. However, they are
very concerned about the costs and burdens associated with the
current reporting system. Indeed, the Bank Secrecy Act represents
perhaps the greatest and costliest compliance challenge currently
facing our banks. The costs and burdens are especially significant
for our smaller bank members which do not have the same resources to
devote to compliance that the larger banks have.
We therefore
recommend that the agencies seek to reduce costs and burdens
associated with money laundering rules. One way to do so is to
provide clearer guidance on what is required under the law. Our
banks have complained that specific and uniform guidance from the
agencies has been lacking. This has created confusion and
uncertainty for our banks, which obviously has driven up costs.
Another way to
reduce costs and burdens involves changing the rules to reduce the
number of defensive filings of suspicious activity reports (SARs).
Currently, banks are filing thousands of SARs that have no value to
law enforcement, simply because they fear liability for failing to
do so. Such filings impose a considerable cost on banks. The
agencies need to work to eliminate these unnecessary filings so that
more of our banks resources can be put to productive use.
Finally, we
recommend raising the threshold for currency transaction reports (CTRs)
from $10,000 to $20,000. This would eliminate a significant number
of filings which are of little or no value to tracking money
laundering activities.
In sum, the VBA
encourages the agencies to act vigilantly to reduce burdens in this
area of compliance. The success (and indeed the survival) of our
banks depends on it.
Sincerely,
Walter C. Ayers
President and CEO
Virginia Bankers Association