[Federal Register Volume 59, Number 199 (Monday, October 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25491]
[[Page Unknown]]
[Federal Register: October 17, 1994]
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DEPARTMENT OF THE TREASURY
31 CFR Part 103
Withdrawal of Proposed Amendment to the Bank Secrecy Act
Regulations for Mandatory Aggregation of Currency Transactions for
Certain Financial Institutions and Mandatory Magnetic Media Reporting
of Currency Transaction Reports
AGENCY: Departmental Offices, Treasury.
ACTION: Withdrawal of Regulatory Proposal.
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SUMMARY: On September 6, 1990, Treasury published a Notice of Proposed
Rulemaking (NPRM) proposing requirements for banks with deposits over
$100 million, and certain nonbank financial institutions, regardless of
asset size, to maintain specific systems to aggregate currency
transactions and proposing requirements for financial institutions that
file more than 1,000 Currency Transaction Reports per year to file by
magnetic media. After analysis of the comments received in response to
this NPRM and further study and review, Treasury has decided to
withdraw it.
DATES: The proposal is withdrawn on October 17, 1994.
ADDRESSES: Peter G. Djinis, Director, Office of Financial Enforcement,
Financial Crimes Enforcement Network (FinCEN), Department of the
Treasury, Room 3210-Annex, 1500 Pennsylvania Avenue NW., Washington, DC
20220.
FOR FURTHER INFORMATION CONTACT: PA. Carlos Correa, Chief, Rules and
Regulations, Office of Financial Enforcement, (202) 622-0400.
SUPPLEMENTARY INFORMATION: On September 6, 1990 (55 FR 36663), Treasury
published a Notice of Proposed Rulemaking (NPRM) with two separate
proposals. The first would have required: (1) banks with deposits in
excess of $100 million to maintain systems to aggregate currency
transactions that are conducted by or on behalf of accountholders at
the bank and that affect an account during a business day; and (2)
currency dealers and exchangers, check cashers, and transmitters of
funds to maintain systems and procedures to aggregate currency
transactions that are conducted by or on behalf of customers at the
financial institution during a business day. The second proposal would
have required financial institutions that file more than 1,000 Currency
Transaction Reports (CTRs) a year, to file by magnetic media. Treasury
sought comments on each proposal.
Following publication of the NPRM, numerous financial institutions
implemented aggregation and magnetic media filing systems. Some
implemented these systems in anticipation of a Final Rule. Others
adopted aggregation systems because those systems save costs and
enhance financial institutions' ability to monitor currency activity
for BSA compliance, as well as for other management and marketing
purposes.
In 1990, multiple transaction CTRs accounted for only 51% of the
total number of CTRs filed, while in 1993, multiple transaction CTRs
comprised 70% of all CTRs received by Treasury. Treasury believes the
increased reporting of multiple transactions reflects an increased
awareness in the financial services industry of the importance of BSA
compliance and the availability of automated systems to assist in this
endeavor. Because these systems also meet other important needs of
financial institutions, it is not expected that financial institutions
will discontinue using their aggregation systems upon withdrawal of the
NPRM.
The number of banks filing CTRs magnetically has increased
dramatically. (In 1989, only 50 banks magnetically filed CTRs. By mid-
1994, the number of banks filing magnetically has increased to 532.)
Because magnetic filing reduces financial institutions' CTR processing
and storage costs, it is unlikely that banks will return to paper
processing when the proposed NPRM is withdrawn.
Treasury is currently considering ways to reduce the regulatory
burden of complying with the BSA while enhancing the utility of
information it receives from financial institutions. After careful
consideration of comments describing the potential costs that would be
incurred by financial institutions not yet using automated systems to
aggregate currency transactions, as well as Treasury's intention to
implement additional regulatory changes, Treasury has decided to
withdraw the NPRM.
In reaching this decision, Treasury analyzed comments received in
response to the NPRM and consulted with the Bank Secrecy Act Advisory
Group. The Group, a committee which comprises 30 representatives from
the financial services industry, trades and businesses and state and
federal government, expressed the view that financial institution
resources would be better devoted to programs specifically geared
toward the detection and reporting of suspicious transactions, and the
implementation of mandatory ``know your customer'' programs. Treasury
agrees with this reasoning and is considering regulatory changes
including reporting of suspicious transactions, mandatory ``know your
customer'' programs, and federal licensing and state registration of
nonbank financial institutions.
Dated: September 20, 1994.
Stanley E. Morris,
Director, Financial Crimes Enforcement Network.
[FR Doc. 94-25491 Filed 10-14-94; 8:45 am]
BILLING CODE 4810-25-P
