Changes in money-laundering rules have thrown some thrifts for a loop.
Half the 70 thrifts in 11 western states examined last year were cited for incomplete or inaccurate currency transaction reports, according to an Office of Thrift Supervision official.
Thrifts also had trouble complying with the Truth-in-Lending law - 40% got the finance charge wrong. The Real Estate Settlement Procedures Act wasn't much easier. The OTS reported that 39% of these thrifts had late or missing good-faith estimates of closing costs, and that 30% didn't deliver them within three days of the submitted application, as required.
"The disturbing thing about this list is that many of these problems can have immediate repercussions," Laura Fiene, compliance manager at OTS' San Francisco office, said at the Western League of Savings Institutions' compliance conference here last week. "A lot of these end up with banks paying retributions."
The 70 exams were conducted on thrifts in Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Utah, Washington, and Wyoming.
Edward W. Krause, compliance officer with Great Western Financial Corp. in Chatsworth, Calif., said problems with the new currency reporting rules are not surprising. The reporting regulations for transactions over $10,000 did not take effect until Oct. 1.
Mr. Krause said there's little excuse for the other violations. "Most of these are not new regulations," he said. The settlement procedures law "seems like it's been around for a thousand years."