Small banks reacted with a yawn to a new rule designed to reduce currency transaction report filings.
Bankers applauded the government's goals, but said the rule should be expanded to include all subsidiaries or franchisees of publicly traded companies. Those commenting also suggested simplifying the exemption process and increasing the size of transaction that triggers a report.
"For most community banks that deal with 'main street' business as opposed to 'Wall Street' business, the proposed regulation is worthless," wrote Max Cook, president of the Missouri Bankers Association.
Under the rule, banks do not have to file currency reports on transactions exceeding $10,000 by publicly traded companies and their subsidiaries if they are included on a consolidated tax form.
The rule took effect May 1, but the Treasury Department's Financial Crimes Enforcement Network took suggestions through Aug. 1 on how to make it more effective.
Gary Weiss, compliance specialist with First Merit Corp. in Akron, Ohio, wrote that the rule would have "little impact on his reporting volume," and suggested exempting businesses that are franchises.
"Most national corporations that offer franchise agreements go to great lengths to scrutinize and monitor the franchisees so as not to jeopardize the goodwill of their corporate name," wrote Mr. Weiss. "Why should we not rely on these trustworthy entities' own controls over the franchisees?"
Susan J. Galli, compliance officer at Citibank in New York, wrote that the dollar amount triggering a report should be boosted to $25,000.
Fincen should release a comprehensive list of companies that are exempt from the rules, suggested Kathleen A. Kordek, assistant general counsel for First Virginia Banks Inc. in Falls Church, Va.
The agency considered doing so last year, but shied away from naming names and opted to excuse publicly traded companies and their subsidiaries if they are included on a consolidated tax form.
Other bankers suggested that Fincen establish a department to handle the exemptions on a case-by-case basis. Still others said banks should be able to send a list of exempt companies to the agency, rather than filing an individual report for each firm.
John J. Byrne, senior federal legislative counsel at the American Bankers Association, noted that even if Fincen agrees to expand the exemptions to currency transaction reporting, the government will still be notified of potential financial crimes. Banks are required to file separate reports whenever they are suspicious of any customer.
