May 3, 2005
Mr. Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
Re: “EGRPRA burden reduction
comment”
Dear Sir,
I am the Compliance Officer of
SpiritBank with assets of $679 million, which includes our Holding
Company. Our Head Office is located in Tulsa, Oklahoma. As a
community banker, I would first like to thank the FDIC, for their
continued efforts and positive approach to the EGRPRA - Economic
Growth and Regulatory Paperwork Reduction Act of 1996.
This letter addresses my
concerns and recommendations relating to requirements that I believe
are outdated, unnecessary or unduly burdensome in regard to BSA –
Bank Secrecy Act and Anti -Money Laundering laws in relation to
Safety and Soundness.
CTR – Raise the threshold
for reporting
Increase the value of a CTR –
Currency transaction report by raising the threshold to a level in
line with inflation adjusted transaction activity. The $10,000.00
threshold is approximately 35 years old. Consider a threshold of
$20,000.00 to $25,000.00, as suggested to FINCEN, in Februrary 2005,
by the ABA – American Bankers Association. The annual filing of
CTR’s, which exceeds 10 million a year cannot be reviewed by law
enforcement on local or national levels. Law enforcement must rely
on other indicators or information, including SAR’s, 314A and OFAC
reports to prioritize their investigations.
The increase in the CTR
reporting threshold would allow law enforcement, financial
institutions and their employees to spend more time monitoring for
“suspicious activity”. And would also reduce the amount of time that
regulators and financial institutions spend on correcting technical
mistakes on CTR’s that will not be utilized in an
investigation.
CTR Exemptions –
Biennial renewal for Phase II
The law should be changed to
require that mandatory paper work be completed and filed, only if an
entity should be removed from an exempt status based on the biennial
review findings. Exempt accounts are still subject to suspicious
activity review and filing of a SAR report, if engaged in suspicious
activity.
SAR’s – Suspicious Activity
Reports
Identify, if any, activity that
law enforcement asserts no interest, so no need for repetitive
filing of SAR’s is discontinued. Example: Nigerian Scam, a bank
employee or customer receives a fax, letter or email stating that if
they provide their account information the sender will share a large
amount of money with them. This scam and similar variations has been
in existence for over 20 years and has evolved from letters and
phone calls to fax and email as technology has advanced.
Also, establish guidelines when
repetitive filings are not required on the same customer when an
original report has been filed and similar activity is continued.
Regulatory Confusion
The regulatory confusion in
relation to MSB’s has been very time consuming and burdensome for
the Banking Industry. The Federal Agencies should all be in
agreement, before publishing and enforcing agency guidelines, exam
procedures and Q & A’s concerning anti-money laundering laws,
including issues related to MSB’s - Money Service Businesses. The
threat of zero tolerance that is implied only adds to the
frustration of Bankers who are doing there best to comply.
As a Community Banker, I am
aware that legitimate MSB’s as non-traditional banking entities
offer a needed service to people that have come from backgrounds
where they have not used the services of traditional types of
financial institutions, such as banks. And although I do not have
the statistics, MSB’s must account for a large volume of money
movement that has an impact on the economy on a local and national
level.
The confusion and excessive
regulation has been cause for our Bank to curtail our activities
with MSB’s.
In conclusion, I believe that
the FDIC and other federal agencies will make major improvements to
the Anti-money laundering laws through their continued efforts to
reduce regulatory burden and confusion. And I urge the FDIC to take
into consideration the recommendations offered in this letter.
Sincerely,
Pat Hooks
Vice President of Compliance
SpiritBank
Tulsa, Oklahoma
