[Federal Register Volume 59, Number 199 (Monday, October 17, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-25491] [[Page Unknown]] [Federal Register: October 17, 1994] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF THE TREASURY 31 CFR Part 103 Withdrawal of Proposed Amendment to the Bank Secrecy Act Regulations for Mandatory Aggregation of Currency Transactions for Certain Financial Institutions and Mandatory Magnetic Media Reporting of Currency Transaction Reports AGENCY: Departmental Offices, Treasury. ACTION: Withdrawal of Regulatory Proposal. ----------------------------------------------------------------------- SUMMARY: On September 6, 1990, Treasury published a Notice of Proposed Rulemaking (NPRM) proposing requirements for banks with deposits over $100 million, and certain nonbank financial institutions, regardless of asset size, to maintain specific systems to aggregate currency transactions and proposing requirements for financial institutions that file more than 1,000 Currency Transaction Reports per year to file by magnetic media. After analysis of the comments received in response to this NPRM and further study and review, Treasury has decided to withdraw it. DATES: The proposal is withdrawn on October 17, 1994. ADDRESSES: Peter G. Djinis, Director, Office of Financial Enforcement, Financial Crimes Enforcement Network (FinCEN), Department of the Treasury, Room 3210-Annex, 1500 Pennsylvania Avenue NW., Washington, DC 20220. FOR FURTHER INFORMATION CONTACT: PA. Carlos Correa, Chief, Rules and Regulations, Office of Financial Enforcement, (202) 622-0400. SUPPLEMENTARY INFORMATION: On September 6, 1990 (55 FR 36663), Treasury published a Notice of Proposed Rulemaking (NPRM) with two separate proposals. The first would have required: (1) banks with deposits in excess of $100 million to maintain systems to aggregate currency transactions that are conducted by or on behalf of accountholders at the bank and that affect an account during a business day; and (2) currency dealers and exchangers, check cashers, and transmitters of funds to maintain systems and procedures to aggregate currency transactions that are conducted by or on behalf of customers at the financial institution during a business day. The second proposal would have required financial institutions that file more than 1,000 Currency Transaction Reports (CTRs) a year, to file by magnetic media. Treasury sought comments on each proposal. Following publication of the NPRM, numerous financial institutions implemented aggregation and magnetic media filing systems. Some implemented these systems in anticipation of a Final Rule. Others adopted aggregation systems because those systems save costs and enhance financial institutions' ability to monitor currency activity for BSA compliance, as well as for other management and marketing purposes. In 1990, multiple transaction CTRs accounted for only 51% of the total number of CTRs filed, while in 1993, multiple transaction CTRs comprised 70% of all CTRs received by Treasury. Treasury believes the increased reporting of multiple transactions reflects an increased awareness in the financial services industry of the importance of BSA compliance and the availability of automated systems to assist in this endeavor. Because these systems also meet other important needs of financial institutions, it is not expected that financial institutions will discontinue using their aggregation systems upon withdrawal of the NPRM. The number of banks filing CTRs magnetically has increased dramatically. (In 1989, only 50 banks magnetically filed CTRs. By mid- 1994, the number of banks filing magnetically has increased to 532.) Because magnetic filing reduces financial institutions' CTR processing and storage costs, it is unlikely that banks will return to paper processing when the proposed NPRM is withdrawn. Treasury is currently considering ways to reduce the regulatory burden of complying with the BSA while enhancing the utility of information it receives from financial institutions. After careful consideration of comments describing the potential costs that would be incurred by financial institutions not yet using automated systems to aggregate currency transactions, as well as Treasury's intention to implement additional regulatory changes, Treasury has decided to withdraw the NPRM. In reaching this decision, Treasury analyzed comments received in response to the NPRM and consulted with the Bank Secrecy Act Advisory Group. The Group, a committee which comprises 30 representatives from the financial services industry, trades and businesses and state and federal government, expressed the view that financial institution resources would be better devoted to programs specifically geared toward the detection and reporting of suspicious transactions, and the implementation of mandatory ``know your customer'' programs. Treasury agrees with this reasoning and is considering regulatory changes including reporting of suspicious transactions, mandatory ``know your customer'' programs, and federal licensing and state registration of nonbank financial institutions. Dated: September 20, 1994. Stanley E. Morris, Director, Financial Crimes Enforcement Network. [FR Doc. 94-25491 Filed 10-14-94; 8:45 am] BILLING CODE 4810-25-P