Banks soon will be freed from filing more than 500,000 currency transaction reports per year as the government continues to exempt businesses from the requirement.
A top official at the Financial Crimes Enforcement Network, or Fincen, said the Treasury Department would release a proposal this month exempting banks from reporting transactions of more than $10,000 by businesses that file consolidated tax forms.
Fincen officials have previously exempted domestic banks, government agencies, and companies whose stocks are traded on the New York Stock Exchange, American Stock Exchange, and Nasdaq. However, the agency has never published a rule making those exemptions official.
The upcoming proposal, which would take effect immediately upon release, would do just that, along with excluding consolidated tax form filers from the reporting requirement. This newest exemption would cover most business subsidiaries and corporate-owned franchises, which would be included in their parent companies' tax filings.
The parents would likely already qualify for one of the other exemptions, said Pamela J. Johnson, Fincen assistant director, at the American Bankers Association's compliance teleconference last week.
"We're thinking it will cut out about 500,000 forms," Ms. Johnson said. "We're hoping it may cut as many as 2 million."
Regulators, bankers, and trade group representatives also fielded questions on the new Community Reinvestment Act rules, flood insurance, and other topics. However, Bank Secrecy Act issues took center stage early in the teleconference.
According to Fincen's proposal, banks would submit exemption lists by completing a single transaction report, including names and addresses for all affected business units.
Fincen plans to accept industry comments for 90 days to help further shape exemption categories, Ms. Johnson said. Currently, banks are required to report on all currency transactions exceeding $10,000.
Loan-to-deposit ratios and strategic plans dominated the discussion by regulators of CRA questions at the teleconference.
Compliance officers questioned the regulators, trying to determine what constitutes an acceptable loan-to-deposit percentage. Agency officials, however, avoided answering the question directly.
"I think people are wondering if there's a magic number that we keep in our back pocket that we're just not sharing," said Bobbie Jean Norris, the Federal Deposit Insurance Corp.'s fair-lending specialist. "There is no magic number. It's just going to depend upon each individual bank."
Regulators also said their agencies would not release a sample strategic plan. Banks need to be creative and tailor plans to meet community needs, Ms. Norris said. Sample plans can't help with that task, she said.
Also at the teleconference, Carol Workman, a compliance specialist in the Office of the Comptroller of the Currency, said the agencies had dropped a measure requiring banks to review their entire loan portfolios periodically to ensure compliance with new flood protection rules.
The new rules - minus portfolio review - will take effect by July. They require all properties in government-designated flood hazard areas to have proper insurance. If a borrower does not buy insurance within 45 days, the lender must forcibly obtain it at the customer's expense.
