SAN ANTONIO - The government is making it easier for banks to report suspicious transactions, according to a Federal Reserve Board official.
A revised criminal referral form - designed by the Treasury Department and the banking agencies to detect money laundering - is slated to be unveiled in May. Implementation may take a few months more.
The new version will include changes intended to lessen the paperwork burden, said Rick Small, special counsel at the Fed.
Bankers, who currently must file the form with four to seven agencies, would need to file with only one.
Mr. Small outlined the changes at a conference here sponsored by the American Bankers Association.
One requirement will be added, he said. Bankers will have to note on the form any known information about aliases.
Banks, thrifts, and credit unions must use the form to report detection of loss or suspected violation of a law.
The release is being held back until some technical problems with accompanying software are worked out, said Mr. Small. That software will be given free to banks to help them fill out the forms.
The new form is an attempt by the Treasury Department to cut down on unnecessary reporting, a promise it made in exchange for bankers' help in catching money launderers.
"You got a lot of what you wanted," John Byrne, the ABA's senior legislative representative, told the conferees.
The Fed's Mr. Small had some other good news for banks.
If a bank follows the rules for reporting a suspicious transaction, it cannot be held civilly liable for noncompliance, he said. Bankers had been uncertain about their liability.
"You've got a safe harbor," he said at the ABA's national security and risk management conference, held last week. But, he pointed out, a bank can always be sued.
The government will raise to $5,000 from $1,000 the threshold on reporting loss where a suspect can be identified. That will reduce the compliance burden without making much difference to enforcement, Mr. Small said.
Banks also will get a reprieve on filing reports on loss when there is no potential suspect. The threshold for that requirement will be raised to $25,000 from $5,000.
On this section alone, said Mr. Small, bankers will have to file 25% fewer times than they now do.
Suspected insider abuse involving any amount will still have to be reported, he said.
For the first time, the form will require any information the bank knows about an alias a customer has used and the true identity of that person, Mr. Small said. Most banks that know alias information already report it on the form but had never been officially required to do so.
When a bank notes a suspicious transaction, it will have to send the form to just one agency: the Treasury Department's Financial Crimes Enforcement Network.
Bankers had complained that they now have to send copies of the form to up to seven agencies, including their regulator, the Federal Bureau of Investigation, and the Internal Revenue Service.
Banks will still have to retain a copy and the original documentation for 10 years from the date of the filing, Mr. Small said.
As in the past, the government expects bankers to telephone law enforcement officials if immediate attention is needed.
