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FDIC Federal Register Citations


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This letter addresses my concerns and recommendations relating to requirements that I believe are outdated, unnecessary or unduly burdensome in regard to BSA – Bank Secrecy Act and Anti -Money Laundering laws in relation to Safety and Soundness.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.


Pat Hooks
Vice President of Compliance
Tulsa, Oklahoma

Last Updated 05/06/2005

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