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Inactive Financial Institution Letters 

[Federal Register: March 29, 1999 (Volume 64, Number 59)]
[Proposed Rules]               
[Page 14845-14846]
From the Federal Register Online via GPO Access []



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.


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DATES: Proposed Sec. 563.178 is withdrawn on March 29, 1999.

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.



    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,
[FR Doc. 99-7485 Filed 3-26-99; 8:45 am]

Last Updated 11/15/2011

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