To the Editor:

Important aspects of your article "IRS Delays Use of New Magnetic Currency Transaction Reports" (Oct. 12) were wrong.

Most of the incorrect information was reported as direct quotes from Charles Intriago, editor of the newsletter Money Laundering Alert. Mr. Intriago's statement that the Internal Revenue Service's Detroit Computing Center (IRS/DCC) "was caught not ready to go" and therefore had "to delay" magnetic filing of the new CTR beyond the Oct. 1 deadline is simply not true.

In the interest of an orderly and flexible process in making changes to the reporting requirements, the Financial Crimes Enforcement Network and the Detroit center established a six-month phase-in period ending in December. This transaction period for magnetic filing of the new report was always planned by the Detroit center to accommodate concerns raised by banks that it takes approximately that much time to adopt new systems.

It is also inaccurate, as quoted by Mr. Intriago, that banks were not given sufficient advance notice of this phase-in period for magnetic filing of the new report.

In May the Detroit center and Fincen issued separate news releases that announced the availability of an advance copy of the new currency transactions report and advised magnetic filers to contact the center directly for filing instructions.

In June, well in advance of Oct. 1, the center sent about 1,500 letters to all of its current magnetic filers, as well as other interested bank software companies and other banks that had either applied for or expressed an interest in filing magnetically, to provide them with the specifications for the new magnetic-media filing program.

The Detroit center's June letter also stated that magnetic filers would be "phased in" between Oct. 1 and December . This transition time was provided to allow banks to create compatible systems and permit the center to test each bank's program to ensure compatibility with the magnetic media specifications. This process occurs each time revisions to the transaction report are adopted.

Indeed, the Detroit center is prepared to receive magnetic filing today under the new specifications. However, to date few banks have actually submitted their programs to be tested by the center, and as a result no banks have yet been approved for magnetic media filing under the new format.

In fact, a number of banks have requested an extension of time (beyond December) in which to submit their programs, because they are concerned that their automated systems will not be in place before the end of this year.

Fincen has also widely disseminated information pertaining to the new currency transaction report and its effect on magnetic media filers. This information was first reported on the Treasury Department's computerized Bank Secrecy Act bulletin board in May, and later, in September, in Fincen's published "Guidance on the New CTR."

Formal notices were also distributed in June to all known bank and nonbank associations, including the American Bankers Association, as well as to all federal bank regulators for dissemination to their financial institutions.

In addition, this information has been widely reported by Fincen at numerous Bank Secrecy Act compliance conferences this year.

We have appreciated the American Banker's effort to inform the industry of Fincen's regulatory initiatives, such as implementation of the new currency transaction report, and hope that you will provide this correct information to your readers.

Stanley E. Morris

Director Financial Crimes Enforcement Network

Vienna, Va.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.