WASHINGTON -- The Federal Reserve Board approved record-keeping requirements for most wire transfers Wednesday, despite the concerns of one Fed governor.

The new rules, which take effect in January 1996, force institutions to retain for five years information on the identity of each customer who initiates a wire transfer of $3,000 or more.

The rules apply to banks, brokerage firms, and companies that provide wire transfer services. Banks will not have to create additional records for existing customers.

Fed Governor Lawrence B. Lindsey objected to the $3,000 threshold as too low, saying it would unfairly burden people who rely on Western Union to send large sums.

"Gee, that would make all those people who use Western Union happy," Mr. Lindsey said sarcastically of extra forms some customers might have to complete.

The Justice Department, however, opposed any exemption, according to Fed documents. Justice said criminals will simply divide their money into amounts just below the threshold to avoid the rule, Fed documents state.

Mr. Lindsey, who ultimately voted for the rule, also questioned whether it would effectively combat money laundering, noting that law enforcement officials could not provide concrete assessments of the data's usefulness.

American Bankers Association federal representative Kawika Daguio said he shares Mr. Lindsey's assessments. But, he said the Fed made the rule "more palatable" when it clarified that law enforcement officials had to give institutions a reasonable amount of time to produce the documents.

"Given the fact that we were stuck with the law, they did well by us," Mr. Daguio said of the Fed.

The rules are not as stringent as the Justice Department wanted. The department said in a Dec. 13 letter that regulators should explicitly require institutions to record the name, address, and account numbers of the recipient of the wire transfer.

The Fed, however, rejected that request, saying in the staff recommendation that nearly all institutions already collect that information. Consequently, a new rule is not needed, the staff wrote.

Wire transfers are an extremely popular method of moving money. Last year, the Fedwire handled 71 million transactions involving $208 trillion. Nonbank providers, such as Western Union, handled 12.7 million transfers last year, 98% of which were for amounts less than $3,000.

Congress attempted to block criminals from laundering money through wire transfers when it passed the Annunzio-Wylie Anti-Money Laundering Act of 1992. The law requires regulators to set data collection rules. But, it gave them flexibility to exempt small transfer amounts.

The governors also approved a new policy statement intended to ensure greater safety for the payment and settlement systems. The statement, which applies to foreign exchange and commercial transactions, imposes six safety rules on any netting system that uses a Fed account or the Fedwire.

The new rules do not apply to the check clearing system.

Currently, institutions send each other IOUs during the day to cover their transactions. They then process all the IOUs at the end of the day to determine how much each party owes.

The rules are intended to ensure that the payment system can survive the default of the institution that owes the others the most money. Also, the settlement systems must be reliable, legally enforceable, maintain clearly defined risk management standards, and be open to all qualified institutions.

"I'm delighted we finally arrived at this stage," Fed Chairman Alan Greenspan said after the governors approved the statement, which takes effect upon publication in the Federal Register.

Tackling a host of other proposals dealing with the Fedwire, the Fed also:

* Agreed to publish for comment a plan to extend the Fedwire hours by one hour -- to 3 p.m. for securities transfers and to 3:30 p.m. for reversals. In addition, the central bank agreed to seek comment on whether it should open the Fedwire securities transfer system earlier in the morning.

* Delayed expanding Fedwire on-line fund transfer service hours until the fourth quarter of 1997. The Fed wants to operate the service from 12:30 a.m. to 6:30 p.m.

* Modified the Fedwire transfer format to include more payment-related information. The change would not take effect until 1997.

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