FDIC Federal Register Citations
To Whom It May Concern:
Thank you for the
opportunity, per your request, to comment on regulatory burden relief, as
published at 70 FR 5571. I am Brenda G. Baker, Chief Operations Officer for
PBK Bank. I have been employed at PBK Bank for 26 years in various areas.
Since 1986 I have had BSA responsibilities as BSA Assistant Officer or BSA
Officer along with many other hats to wear. I have seen how BSA, AML and
USA Patriot Act regulations have become more detailed and burdensome for
small community banks.
Our bank is a community
bank. We strive to do the very best job possible to serve the community and
its members. Often that attempt to serve is hampered by undue and
unnecessary regulatory burden. Although that has been the case,
increasingly, since the 1970s, it has become unmanageable since the
September 11 terrorist attacks. While we understand the need to secure our
country and its financial infrastructure, I question whether the
regulations, as implemented and enforced are accomplishing that goal.
Specifically, I am
Bank Secrecy Act. Compliance with this
Act and its regulations is, without doubt one of the most expensive and
time consuming in the bank. That is compounded by complex regulations,
lack of clear and consistent guidance for bankers or examiners, the
apparent ineffectiveness of the data collected (we hear from enforcement
agencies that the information is useless in the form presented), and
severe penalties for unintentional or misunderstood noncompliance. The
regulations need to be streamlined and clarified. Examiners should look
to advise and assist institutions with compliance rather than punish.
But, before any amendments will be successful, the data compilation must
also be re-designed in such a way, and tested, to ensure that law
enforcement will and can utilize it. Otherwise, the regulatory burden
cannot be justified for the bank or the consumer.
Money Service Business. While this
crosses over to other areas of comment made in this letter, it is worthy
of separate comment. Banks should not be expected to monitor the
individual activities of each of its customers, absent suspicious activity
or statutory/regulatory mandates. The recent examination efforts with
regard to MSBs has proven that the response will be that financial
institutions will no longer be willing to shoulder the potential risks
associated with customers who are potentially MSBs. The burden of
reporting should be placed on actual MSBs, not the Bank. It is a huge
task to incorporate procedures for monitoring and policing our customers
for MSB compliance.
USA Patriot Act. Many of the comments
for BSA, above, are equally applicable to these requirements. There needs
to be more clarification as to acceptable and appropriate identification
standards. In addition, those standards must be consistent with the
documentation and information available and verifiable in the various
Regulation D. The restrictions on
transfers and the paying of interest on certain deposit accounts are
archaic. These restrictions should be removed.
Community Reinvestment Act. In todays
world of mobility, existing CRA requirements are no longer evaluative of a
banks investment in and participation with its actual community.
Transaction and customer/community support is becoming more creative as
peoples needs are changing. The problems of CRA compliance are
compounded by the fact that so many other providers of financial services,
such as brokerages and credit unions are not required to comply. If a CRA
type of requirement is retained, it should be modernized to address the
changing needs of our industrys communities.
Again, thank you for this opportunity to comment.
Brenda G. Baker
Chief Operations Officer