The surprise resignation of Robert Werner as the Financial Crimes Enforcement Network's director - the second director to leave the agency in the past 12 months - presents both a challenge and an opportunity to policymakers in the White House, the Treasury Department, and Congress.

The challenge is to find a successor of similar acumen, wisdom, and judgment.

The opportunity is for Fincen to evolve into an even more effective component of the government's long-term efforts to combat money laundering and terrorist financing. Four ideas in particular warrant careful consideration: providing private-sector pay parity for Fincen employees, outsourcing its technology efforts, merging the agency with the Office of Foreign Assets Control, and enhancing private-sector access to Fincen's data.

Observers within Congress, the Bush administration, and the news media have praised the government's efforts to combat terrorist financing as an effective component of its broader strategy against terrorism. Over the past five years Fincen has played a critical role in that success.

Within days of the terrorist attacks in 2001, the agency established a unit to track terrorist assets, staffed in close collaboration with the OFAC. This unit played an important role in identifying terrorist financiers and ensuring sanctions were imposed on them.

Since those early days Fincen has continued to play an important role by implementing the USA Patriot Act through numerous regulations governing customer identification, due diligence, and suspicious activity reports for a broad range of financial institutions.

Fincen also plays a central role in the collection and dissemination of so-called 314(a) requests from law enforcement agencies for financial information on suspects in terrorist or money laundering cases.

Law enforcement agents praise the 314(a) process as highly effective and useful.

To date the requests have led to the identification of more than $21 million in 2,000 accounts, as well as over 100 indictments, 90 arrests, and 10 convictions, according to Fincen. James Sloane and William Fox, two of the agency's former directors, and Mr. Werner deserve credit for these accomplishments.

As Fincen faces the departure of its second director in less than a year, the immediate need is to find a successor, preferably someone who is likely to remain in the post for a longer period of time.

There are many able candidates within Fincen, the OFAC, bank regulators, and other parts of the administration. In addition, there are many well-qualified compliance professionals within financial institutions who could be enticed to serve. The challenge in finding a successor for Mr. Werner will not be a shortage of well-qualified candidates.

The first step in making the job attractive is to ensure that Fincen's salaries are competitive. The departure of two able directors within 12 months for the private sector confirms the obvious - Fincen's salaries are not competitive with those of the private sector, although they have improved in recent years.

One step in meeting the challenge, therefore, would be to make Fincen employee salaries closer or comparable to those offered in the private sector.

Some government agencies, such as the Securities and Exchange Commission, the Office of the Comptroller of the Currency, and the Federal Reserve Board offer their employees salaries that more closely approximate those they could command in the private sector. Congress should authorize Fincen to do the same.

Pay parity is only a first step, however. In my experience, the men and women who serve at Fincen are not motivated primarily by money, but by the opportunity to serve our country in its efforts against financial crime, particularly money laundering and terrorist financing. The best way to attract and retain such people is to give them the tools they need to be most effective and improve the agency's success over the long term.

In addition to pay parity, Congress and the administration could consider the following to help ensure that Fincen is equipped for success.

TECHNOLOGY OUTSOURCING

One of Mr. Werner's major decisions was to pull the plug on Fincen's major technology initiative, BSA Direct, because of the belief that it was unlikely to achieve its goals. The need for improved technology remains, however.

Fincen receives hundreds of thousands of suspicious activity reports a year, in addition to millions of currency transaction reports. Law enforcement agencies need better tools for mining and acting on this data by pursuing suspects and informing financial institutions about patterns of activity.

One solution would be for Fincen to outsource its technology functions to the private sector, such as the consumer-reporting agencies that have proven so adept at receiving, consolidating, and mining financial data.

Though outsourcing would, of course, raise very serious privacy issues, they could be addressed through prudent statutory regulation, independent audits, and congressional oversight - just as they have been addressed in the consumer-reporting context.

BROADER ACCESS TO DATA

Currently, informational asymmetry makes it harder for financial institutions to manage laundering risk.

Simply put, terrorists and other criminals know more about their financial activity than any single financial institution does. It is easy to spread transactions across multiple institutions.

Terrorists and other criminals are passing the ball and running complex plays, while individual institutions try to maintain a one-on-one defense.

We should let banks play a zone defense by giving them access to pooled data on laundering risks.

Though this, too, would raise important concerns about privacy, it is not as controversial as it might first appear. Congress already lets financial institutions share such information. Section 314(b) of the USA Patriot Act gives them a safe harbor from legal liability if they share this information, provided they safeguard it and use it only for risk management.

The trouble in implementing Section 314(b) has been its sporadic and ad hoc use. Congress should authorize financial institutions to have access to the pooled data to make it easier to level the playing field. Just as they do for consumer credit reports, banks likely would be willing to pay a small fee for this information - particularly if it proves effective in helping them manage laundering risks. The fees might even be sufficient to allow the outsourced technology to pay for itself.

A FINCEN-OFAC MERGER

Mr. Werner's own career demonstrates that Fincen and the OFAC have important similarities. Before becoming Fincen's director, he ran the OFAC. Before that he had been the chief of staff at Fincen.

Both agencies have regulatory and enforcement arms. This was demonstrated by, among other things, Fincen's decision last year against Arab Bank, which (controversially) can be read to require financial institutions in certain circumstances to conduct retroactive reviews of transactions by entities and individuals designated by the OFAC.

Also, both agencies help identify terrorist financing targets. Combining them would, I believe, allow the Treasury to develop important efficiencies between them.

The Treasury is already moving in that direction. When Mr. Werner was at the OFAC, he collaborated with Mr. Fox, Fincen's director at the time, to eliminate rules requiring financial institutions to file duplicate reports with both agencies.

While there are, of course, some important differences between the two units and the statutes they implement, the Treasury should work with Congress to determine whether effective synergies could be developed through a merger. An additional benefit of a merger that created a more effective agency would be elevating the importance of the director's role - and making it more likely that the director would stay in place longer.

Like many others, I am sorry to see Mr. Werner leave Fincen. Through his quiet leadership and excellent judgment, he made many contributions to the fight against laundering and terrorist financing. Hopefully, we can use his departure as an opportunity to enhance Fincen's effectiveness over the long term.

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