WASHINGTON -- Consumer activists and bankers clashed Wednesday as a House Banking subcommittee got down to work on legislative proposals to ease the paperwork burden on banks.
Banks file 27,000 currency transaction reports a day, "at a cost of $18 each," said C. Kendric Ferguson, chairman of the National Bank of Commerce, Altus, Okla.
"I'm not even sure where they go," he added. "We know they are not helping catch crooks or drug dealers."
Public Advocates Cry Foul
The major regulatory relief legislation pending before Congress would transfer responsibility for filing those reports from the financial institution to the depositor.
"That's one of the most dangerous provisions in the bill," said Suzannah B. Goodman, banking lobbyist for Congress Watch, a unit of the Ralph Nader-sponsored Public Citizen. "It would effectively gut the law."
Ms. Goodman said bankers are mistaken in their belief that the cash transaction reports are not used by law enforcement officials,
Regulatory Relief Measures
"I ran this provision past people in the Department of Justice and they went ballistic," she said. "Contrary to what you say, they really use CTRs to catch drug-money launders, and drugs are a big problem in society today."
The hearing before the House Banking subcommittee on financial institutions focused on regulatory relief legislation introduced by Rep. Doug Bereuter, R-Neb., and Rep. Jim Bacchus, D-Fla.
Even if the panel does not vote out a regulatory relief legislation this year, the Senate is expected to pass a community development bank bill that includes a number of provisions from the Bereuter-Bacchus proposal.
In a House-Senate conference on the community development bank bill, the hearing record being created by the financial institutions subcommittee will strengthen the hand of House proponents of regulatory relief.
