E6-1744. Financial Crimes Enforcement Network; Proposed Renewal Without Change; Comment Request; Customer Identification Programs for Various Financial Institutions

AGENCY:

Financial Crimes Enforcement Network, Department of the Treasury.

ACTION:

Notice and request for comments.

SUMMARY:

As part of our continuing effort to reduce paperwork and respondent burden, the Financial Crimes Enforcement Network invites comment on a proposed renewal, without change, to information collections found in regulations requiring futures commission merchants, introducing brokers, banks, savings associations, credit unions, certain non-federally regulated banks, mutual funds, and broker-dealers, to develop and implement customer identification programs reasonably designed to prevent those financial institutions from being used to facilitate money laundering and the financing of terrorist activities. This request for comment is being made pursuant to the Paperwork Reduction Act of 1995, Public Law 104-13, 44 U.S.C. 3506(c)(2)(A).

DATES:

Written comments are welcome and must be received on or before April 10, 2006.

ADDRESSES:

Written comments should be submitted to: Office of Chief Counsel, Financial Crimes Enforcement Network, Department of the Treasury, P.O. Box 39, Vienna, VA 22183, Attention: Customer Identification Program Comments. Comments also may be submitted by electronic mail to the following Internet address: [e-mail], again with a caption, in the body of the text, “Attention: Customer Identification Program Comments.”

Inspection of comments. Comments may be inspected, between 10 a.m. and 4 p.m., in the Financial Crimes Enforcement Network reading room in Washington, DC. Persons wishing to inspect the comments submitted must request an appointment by telephoning [phone] (not a toll free number).

FOR FURTHER INFORMATION CONTACT:

The Regulatory Policy and Programs Division at [phone].

SUPPLEMENTARY INFORMATION:

Abstract: The statute generally referred to as the “Bank Secrecy Act,” Titles I and II of Public Law 91-508, as amended, codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959, and 31 U.S.C. 5311-5332, authorizes the Secretary of the Treasury, inter alia, to require financial institutions to keep records and file reports that are determined to have a high degree of usefulness in criminal, tax, and regulatory matters, or in the conduct of intelligence or counter-intelligence activities, to protect against international terrorism, and to implement counter-money laundering programs and compliance procedures.^[1]

Regulations implementing Title II of the Bank Secrecy Act appear at 31 CFR part 103. The authority of the Secretary of the Treasury to administer the Bank Secrecy Act has been delegated to the Director of the Financial Crimes Enforcement Network. Regulations implementing section 5318(h)(1) are found at 31 CFR 103.121, 103.122, 103.123, and 103.131. In general, the regulations require the referenced financial institutions to establish, document, and maintain customer identification programs as an aid in securing the U.S. financial system. Financial institutions defined in 31 U.S.C. 5312(a)(2) and 31 CFR 103.11 are subject to the customer identification program requirement.

1. Title: Customer identification programs for banks, savings associations, credit unions, and certain non-federally regulated banks. (31 CFR 103.121.)

Office of Management and Budget Control Number: 1506-0026.

Abstract: Banks, savings associations, credit unions, and certain non-federally regulated banks are required to develop and maintain customer identification programs. Section 326 of the USA Patriot Act of 2001, (Pub. L. 107-56) provides that, at a minimum, financial institutions implement reasonable procedures for: (1) Verifying the identity of any person seeking to open an account, to the extent reasonable and practicable; (2) maintaining records of the information used to verify the person's identity, including name, address, and other identifying information; and (3) determining whether the person appears on any lists of known or suspected terrorists or terrorist organizations provided to the financial institution by any government agency. In prescribing these regulations, the Secretary was directed to take into consideration the various types of accounts maintained by various types of financial institutions, the various methods of opening accounts, and the various types of identifying information available. (See FR 68, 25090, May 9, 2003.)

Current Action: There is no change to existing regulations.

Type of Review: Extension of a currently approved information collection.

Affected Public: Business and other for-profit institutions and non-profit institutions.

Burden: Estimated Number of Respondents: 22,060.

Estimated Average Annual Recordkeeping Burden per Respondent: 10 hours.

Estimated Average Annual Disclosure Burden per Respondent: 1 hour.

Estimated Total Annual Respondent Burden: 242,660 hours.

2. Title: Customer identification program for broker-dealers. (31 CFR 103.122.)

Office of Management and Budget Control Number: 1506-0034.

Abstract: Broker-dealers are required to establish and maintain customer identification programs. (See FR 68, 25113, May 9, 2003.) A copy of the written program must be maintained for five years.

Current Action: There is no change to existing regulations.

Type of Review: Extension of a currently approved information collection.

Affected Public: Business and other for-profit institutions.

Burden: Estimated Number of Respondents: 5,448.

Estimated Average Annual Burden Per Respondent: The estimated average burden associated with the notice requirement in this proposed rule is two minutes per respondent.

Estimated Number of Hours: 630,896.

3. Title: Customer identification programs for futures commission merchants and introducing brokers. (31 CFR 103.123.)

Office of Management and Budget Control Number: 1506-0022.

Abstract: Futures commission merchants and introducing brokers are required to develop and maintain customer identification programs. (See FR 68, 25149, May 9, 2003.) A copy of the written program must be maintained for five years.

Current Action: This requirement was renewed effective November 30, 2005; it is being renewed again so that all the customer identification program requirements for various financial institutions may be considered together concurrently.

Type of Review: Extension of a currently approved information collection.

Affected Public: Business and other for-profit institutions.

Burden: Estimated Number of Respondents: 1,856.

Estimated Average Annual Burden Per Respondent: The estimated average burden associated with the notice requirement in this proposed rule is two minutes per espondent.

Estimated Number of Hours: 20,471.

4. Title: Customer identification programs for mutual funds. (31 CFR 103.131.)

Office of Management and Budget Control Number: 1505-0033.

Abstract: Mutual funds are required to establish and maintain customer identification programs. (See FR 68, 25131, May 9, 2003.) A copy of the written program must be maintained for five years.

Current Action: There is no change to existing regulations.

Type of Review: Extension of a currently approved information collection.

Affected Public: Business and other for-profit institutions.

Burden: Estimated Number of Respondents: 2,296.

Estimated Average Annual Burden Per Respondent: The estimated average burden associated with the notice requirement in this proposed rule is 2 minutes per respondent.

Estimated Number of Hours: 266,700.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Office of Management and Budget. Records required to be retained under the Bank Secrecy Act must be retained for five years. Generally, information collected pursuant to the Bank Secrecy Act is confidential but may be shared as provided by law with regulatory and law enforcement authorities.

Request for Comments

Comments submitted in response to this notice will be summarized and/or included in the request for Office of Management and Budget approval. All comments will become a matter of public record. Comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected: (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and (e) estimates of capital or start-up costs and costs of operation, maintenance and purchase of services to provide information.

Dated: February 3, 2006.

William D. Langford, Jr.,

Associate Director, Regulatory Policy and Programs Division, Financial Crimes Enforcement Network.

Footnotes

1.  Language expanding the scope of the Bank Secrecy Act to intelligence or counter-intelligence activities to protect against international terrorism was added by Section 358 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, Pub. L. 107-56.