WASHINGTON -- As a thank-you to bankers, the Treasury Department last week announced four fixes of Bank Secrecy Act regulations.
"The actions ... indicate the path we hope to take in `reinventing' the way Treasury and the financial community jointly fight money laundering," Treasury Secretary Lloyd Bentsen said in a statement. "Today's actions significantly reduce the burden on the financial community."
At the core of the changes is a new form for currency transaction reports. The new CTR has 38 fields in which information must be entered, 31% fewer than the current 55.
The American Bankers Association estimated the new form would save banks more than $40 million.
Bankers file CTRs on cash transactions of $10,000 or more. Many bankers have complained that the reports are unnecessarily long and time-consuming. As part of the Community Development and Regulatory Improvement Act passed last month, the Treasury was required to reduce the burden of filing these forms.
In addition to trimming the work that goes into each report, the Treasury also wants to cut the number of CTRs banks must file. The department plans to increase the number of categories of business for which reporting will not be required.
Another important change announced last Friday at a meeting of department officials and industry leaders eliminated the six-year-old "$3,000 log rule." That rule required banks to record chronologically and retain for five years all cash purchases of travelers checks, bank checks, and cashier's checks exceeding $3,000.
Banks have long complained that those logs not only were difficult to keep but also rarely used by law enforcement officials.
The Treasury made it clear that these changes are the beginning of a give-and-take between money laundering enforcement agencies and the banking industry.
"The [Bank Secrecy Act] is a vital weapon in the battle against financial crime," said Under Secretary for Enforcement Ronald K. Noble.
"Treasury's ability to exploit that weapon depends on the support and cooperation of the banking and financial industries."
John Byrne, the ABA's senior counsel and a member of Treasury's BSA Advisory Group, said the changes "will allow bankers to shift their focus from filing routine reports to finding and stopping criminals who move illegal monies through our nation's financial institutions."
The Treasury also withdrew two proposed rules pending since 1990.
First, banks will not have to file CTRs by magnetic tape, the agency said. It found that most banks already file magnetically so that it was unnecessary to mandate it.
Dropping the rule also leaves room for banks that might be making software buying decisions now. Some banks would rather file electronically, which Treasury sees as the newest option.
The second rule withdrawal relieves banks with more than $100 million of assets of any obligation to establish a system for aggregating cash transactions.
The proposed rule was designed to eliminate structuring by customers who deposited nonreportable amounts in one account through different branches of the same bank. As with magnetic filing, Treasury found that most banks already have systems to identify such problems.
The Treasury also is working with the BSA Advisory Group to develop a better way for banks to identify suspect transactions. The department said it hopes to create a single form and designate a single point of contact for filing such forms.
