Federal Deposit
Insurance Corporation

To Whom It May Concern:

We would like to express first our enthusiasm and general support for the proposed rules in their present form. We think that this sort of requirement is both necessary and overdue to provide for effective enforcement and investigation.

We would also like to offer the following specific thoughts and comments with regard to the proposed rules.

1. We believe strongly that these regulations must be applied consistently and evenly to all parties who serve as custodians of customer funds, regardless of what they are called. To do otherwise undermines the entire effort, makes the efforts of those who comply meaningless and leaves our country vulnerable to the risks this section attempts to address. Those who would be subject to this regulation have had adequate time to both understand and prepare for the need and nothing in the proposed rules is a surprise. We believe that no exceptions and no exemptions should be granted.

2. We hope that the Federal Financial Regulators will be consistent in their application of this and other federal rules, recognizing that the requirement to retain, in file, picture identification was until now generally discouraged (we think without good reason) based upon a presumption that a picture would or could introduce bias into the lending process. Accordingly, many past opportunities to easily obtain such ID without engendering ill will have been lost. We would hope that the agencies would very clearly communicate this new position to 100% of their staff.

3. We believe that the proposed rule should be implemented in such a way as to minimize the variation in requirements and procedures from bank to bank. The fact that the current and proposed regulations require written procedures without providing, as an alternative, a clear crisp "prototype" which could simply be adopted (or tailored only in those areas where flexibility exists) allows compliance and compliance examinations to be trivialized by turning the focus away from the "objectives" to instead focus on the "means". An effective program with no written procedures is better than a perfectly documented program that does not work, and examinations should not be trivialized with meaningless findings.

In the same vein, the OMB estimates grossly underestimate the burden of implementation. Reading the proposed regulation alone takes very close to the one hour estimated to be the average annual burden of the record keeping requirements. Rewriting, editing, approving and communicating existing policies (because of the errant focus of enforcement mentioned above) will easily take the 10 hours estimated to be adequate for the annual record keeping requirements. Thus OMB's entire annual budget will be spent before any compliance whatsoever is attempted. This is an unfunded mandate, and one we happen to support, but please do not delude yourselves.

4. We believe strongly that the federal government has a significant role to play in providing "adequate notice" to customers and explaining the regulation in the context of every person's patriotic duty. We would encourage TV, radio and newspaper press releases and public service announcements aimed at creating a positive public awareness and perception.

5. We are not in favor of the exemptions currently provided under 103.34 (a)(3).

6. We believe "account" should be defined as broadly as possible, and that funds that cannot be subjected to the proposed rules (due to foreign laws) should be "blocked" from entry to the U.S.