WASHINGTON - Federal regulators on Wednesday proposed dumping the criminal referral form that depository institutions currently use to report suspicious transactions.

It is to be replaced in October by a simpler and shorter form - the Suspicious Activity Report.

Banks, thrifts, and credit unions will have to file the new report with just one government agency, rather than six. The Financial Crimes Enforcement Network will collect the reports and make them available to the other government agencies that currently receive copies of referral forms.

"Banks do six or seven copies of each referral now," explained Richard A. Small, special counsel with the Federal Reserve Board. "Now banks will file just one form to one location."

On Wednesday, the Fed proposed the new three-page form, which the public may comment on through Sept. 1.

To clear up confusion caused by the filing of two forms to report the same suspected crime, the Fed plans to eliminate the box bankers now must check on currency transaction reports designed to flag suspicious activity.

"Combining suspicious financial transaction reporting and criminal referral reporting should reduce confusion, increase the accuracy and efficiency of reporting, and reduce the burden on financial institutions in reporting known or suspected violations," the Fed's proposal states.

Other regulatory agencies as well as the Treasury Department also plan to adopt this new suspicious activity report. Filing a common form to a single place is expected to improve the data base the government uses in fighting money laundering database.

"The data base will enhance federal law enforcement and bank supervisory agencies' ability to track, investigate, and prosecute - criminally, civilly, and administratively - individuals and entities suspected of violating federal criminal law," according to the Fed's proposal.

The government will provide software this fall that will allow depository institutions to file the new reports through any type of computer disk.

"We're going to actually encourage the banks to use magnetic means," said Mr. Small. "We're going to encourage the banks not to use paper."

In a further attempt to reduce reporting burdens, the Fed is proposing to increase fivefold the dollar thresholds for some suspicious transactions.

If a bank suspects criminal activity but cannot identify who did it, the new rule will require a report only if the dollar amount involved exceeds $25,000. The current threshold is $5,000.

The Fed also plans to increase to $5,000 from $1,000 the threshold for reporting suspicious activity when the criminal can be identified.

The Fed estimates that these two changes will reduce filings by 25%.

Depository institutions will still be required to report - regardless of the dollar amount - any suspected violations of law committed by insiders.

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