Lapas attēli

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We also vigorously supported the work of the IRS/Financial

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Despite this progress, we believe that we must continue to do


To ensure that the progress of the last year is not

lost, on-going training and industry awareness efforts are


In light of the Deficit Reduction Act of 1985

(Gramm-Rudman-Hollings), however, although OCC remains committed to such efforts, we may not be able to maintain the

same pace during 1986.

Resources have been severely strained,

and it has been necessary to make across-the-board reductions in training expenditures. Moreover, District training

conferences and OCC attendance at public conferences and

seminars, which have been valuable vehicles for sharing

information on BSA and other important topics, have been

cancelled or reduced.

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In addition to on-going training and education efforts, we

believe that progress is essential in two critical areas if

gains are to be made in the Federal Government's efforts to

ensure compliance with the BSA.

These areas

are (1) increased

coordination among the agencies with compliance and enforcement

responsibilities and (2) more effective use of available data

for targeting compliance and enforcement efforts.

Increased Interagency Coordination

We have great faith in the benefits which can be derived from

the interagency working group process.

As discussed above, the

Justice Department's working group, in which we are a very

active participant, has proven how effectively the bank

regulators can work together with the law enforcement


We believe this experience can be used as

a model

for success in the BSA area, and as an active participant in

the IRS/Financial Institutions Regulatory Working Group, we are

looking forward to the same accomplishments in the BSA area.

Improved Targeting

Improved communications and utilization of available BSA and other financial data could, we believe, significantly increase the return on our enforcement and compliance resources. Clearly, neither occ nor any of the other financial

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institutions regulatory agencies has the resources necessary to find all compliance violations through the examination process


Instead, our examiners continually make judgments

based on available information as to where problems are most

likely to exist, targeting their efforts in an attempt to

identify and correct the most serious deficiencies.

This approach is not unlike that used by the IRS in its tax

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We have had some success in targeting BSA compliance efforts

using computer analyses provided to us periodically by the

Customs Service.

The analyses which have, for instance,

identified banks whose currency shipments to or from the

Federal Reserve Banks have been out of proportion to the number

of Currency Transaction Reports (CRT) they have filed, have to date, focused only on certain geographic areas. We think this

approach has great value and would like to see it used even


We have actively encouraged Treasury efforts through the

IRS/Financial Institutions Regulatory Working Group to increase the use of available data and to develop statistical tools for


analyzing the CTRS and other financial data to target

institutions for intensive compliance review.

We also are

working to gain on-line access to the Treasury Financial Law

Enforcement Center's CTR database to permit our examiners to test, as part of their examinations, whether the CTRS in a

bank's file have in fact been filed with the Treasury.

Legislative Initiatives

A great deal can be accomplished through initiatives in the two

areas I have discussed

increased interagency cooperation and

coordination and improved use of available resources to target

compliance and enforcement issues.

We believe that additional

legislation is necessary, however, to eliminate restraints on

interagency cooperation and coordination and to specifically

make money laundering a crime.

We agree with the general concept and intent of the various

money laundering bills that have been proposed and support H.R. 2785, the Administration's proposal. We in no way

countenance financial institutions being used to facilitate or

conceal crime and therefore we look forward to working with the subcommittee in its review of the various proposals.

Among other things, these bills would specifically make it a

substantive crime for anyone to knowingly use or allow a


financial institution to be used to aid someone in unlawful activities. We fully support the concept of such proposals. We believe, however, that care must be taken to ensure that the

law does not proscribe inadvertent conduct by an unwitting


We likewise believe that the proposed modifications to the Right to Financial Privacy Act (RFPA) are necessary to enable

individuals and institutions to make referrals of suspicious

activities to the law enforcement community without inadvertently exposing themselves to potential substantial liability for violations of the RFPA or other Federal or state privacy acts.

As to the new summons power given in the Administration's bill

to the Secretary of the Treasury, we believe it may be

appropriate under certain circumstances for that power to be

delegated by the Secretary to the financial institutions

regulatory agencies in order to further an examination or a

civil investigation.

For that reason, we support the

provisions of H.R. 2785 which would authorize the Secretary to

delegate the power.

The bill introduced by Representative Hughes, H.R. 1474,


make "wire and other electronic transfers“ subject to being

reported on a Currency or Monetary Instrument Report (CMIR).

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