ACB: Press Releases

Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release May 18, 2006 #06-29
E-mail: [email protected]

ACB URGES CONGRESS TO PROVIDE RELIEF FOR COMMUNITY BANKS FROM CURRENCY TRANSACTION REPORT FILINGS

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WASHINGTON, D.C. — America‘s Community Bankers urged Congress today to provide community banks with relief from filing currency transaction reports on routine business transactions and to increase the CTR filing threshold.

Testifying before the House Financial Services Subcommittee, ACB Chairman F. Weller Meyer said: “Community banks understand the importance of preventing and identifying crime and abuse. Yet, the cumulative burden placed on community banks has very real opportunity costs.” Meyer is also chairman, president and CEO, Acacia Federal Savings Bank, Falls Church, Va.

Meyer urged adoption of H.R. 5341, a bill by subcommittee chairman Spencer Bachus (R-Ala.), Rep. Barney Frank (D-Mass.), the House Financial Services Committee‘s ranking Democrat, and others, that would simplify the process for banks to exempt certain business customers from CTR reporting. A depository institution that elects to exempt a seasoned business customer would be required to file a one-time notice.

“This important legislation would amend CTR reporting requirements in a way that reduces cost and regulatory burden on financial institutions while ensuring that the government receives highly useful information that helps law enforcement safeguard the United States financial system from abuses of financial crime,” Meyer said.

“We do not believe that repeated CTR filings on cash transactions that are routine for particular business customers have a ‘high degree of usefulness‘ [as required by statute] in prosecuting financial crime,” he added.

Meyer explained that the current exemption process, while well intentioned, doesn’t work for small community banks because the exemption procedures and requirements are overly complex, costly and may open the bank to regulatory action if not used correctly.

Because the $10,000 filing threshold has not been increased since it was first set in 1970 and because some smaller community banks would continue to find even an improved exemption process costly to implement, ACB recommended an increase in the dollar value that triggers CTR filing.

“Raising the threshold,” he explained, “does not mean that institutions will be relieved from monitoring account activity for suspicious transactions below the CTR reporting requirement,” he said. “Increasing the threshold would enable financial institutions to alert law enforcement about activity that is truly suspicious or indicative of money laundering, as opposed to bogging down the data mining process by filing reports on common transactions,” he added.

“The fees that a community bank spends for software that monitors cash transactions is money that an institution could have spent to hire multiple tellers, hire a new loan officer to reach out to the community‘s small businesses, or develop and market a new product,” Meyer said. “What may seem like insignificant costs to law enforcement have very real business implications for community banks and their communities,” he added.

The testimony is available here.

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

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