[Federal Register: March 29, 1999 (Volume 64, Number 59)]
[Proposed Rules]
[Page 14845-14846]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29mr99-21]
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DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 563
[No. 99-12]
RIN 1550-AB15
Know Your Customer
AGENCY: Office of Thrift Supervision (OTS), Treasury.
ACTION: Proposed rule; withdrawal.
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SUMMARY: The Office of Thrift Supervision ("OTS") published a Notice
of Proposed Rulemaking in the Federal Register on December 7, 1998 that
would have required savings associations to develop and maintain "Know
Your Customer" programs. The Board of Governors of the Federal
[[Page 14846]]
Reserve System, the Federal Deposit Insurance Corporation, and the
Office of the Comptroller of the Currency contemporaneously published
similar proposals. Collectively, the banking agencies received over
200,000 comments from the public, the overwhelming majority of which
were strongly opposed to the adoption of the proposed regulation. After
considering the issues raised by the comments, and in view of the
strong opposition to the proposed regulation, OTS is withdrawing the
Notice of Proposed Rulemaking.
DATES: Proposed Sec. 563.178 is withdrawn on March 29, 1999.
FOR FURTHER INFORMATION CONTACT: Larry A. Clark, Director, Trust
Programs, (202) 906-5628, Gary C. Jackson, Analyst, Compliance Policy
and Specialty Examinations, (202) 906-5653, Christine Harrington,
Counsel (Banking and Finance), (202) 906-7957, or Karen Osterloh,
Assistant Chief Counsel, (202) 906-6639, Office of Thrift Supervision,
1700 G Street, NW., Washington, DC 20552.
SUPPLEMENTARY INFORMATION:
Background
On December 7, 1998, OTS published a proposed "Know Your
Customer" regulation (63 FR 67536, Dec. 7, 1998). The proposed
regulation was intended to provide guidance to savings associations to
facilitate and ensure their compliance with existing federal reporting
and recording keeping requirements, such as those found in the Bank
Secrecy Act. It was intended to help protect the integrity and
reputation of the financial services industry as it combats money
laundering and other illegal activities that might be occurring through
financial institutions.
OTS received approximately 5,000 comments on the proposal. Comments
came from individuals, depository institutions of all sizes, members of
Congress, trade and industry research groups, and regulatory bodies.
Very few commenters supported the proposed regulation.
The overwhelming majority of commenters were private citizens who
strongly opposed the proposal as an invasion of personal privacy.
Depository institutions, their holding companies, and industry trade
groups commenting on the proposal also opposed the proposed regulation,
arguing that the regulation would be very costly to implement,
especially for small institutions; would invade customer privacy; and
would unfairly disadvantage depository institutions if all segments of
the financial services industry were not covered.
Withdrawal of the Proposed Rule
The OTS is sensitive both to the concerns raised by the commenters
and to the need for a supervisory framework that ensures that the
institutions we regulate adhere to the nation's anti-money laundering
statutes, including the Bank Secrecy Act. OTS has carefully reviewed
the comments received. After considering the concerns raised, we are
convinced the proposed regulation does not strike the appropriate
balance. Based upon that review, OTS withdraws its proposal published
in the Federal Register on December 7, 1998, at 63 FR 67536.
By the Office of Thrift Supervision.
Dated: March 22, 1999.
Ellen Seidman,
Director.
[FR Doc. 99-7485 Filed 3-26-99; 8:45 am]
BILLING CODE 6720-01-P
