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The Subcommittee received testimony from the Assistant Attorney General for the Criminal Division of the Department of Justice, who briefed the Subcommittee on the status of the negotiations between the United States and other countries in efforts to enact a mutual legal assistance treaty. Should the central banks provide assistance to their respective countries in these deliberations, as they relate to international banking
It is acknowledged that financial institutions, both U.S. and foreign, have rapidly expanded their overseas offices. The Basle Committee, recognizing that such activity may create safety and soundness problems, attempts to deal with these concerns through efforts to coordinate bank supervision. Why shouldn't the Basle Committee, or some other international banking committee which included the Federal Reserve as a participant, provide an exchange of information on suspected illegal activities which have to rely on the international banking network as a vital support system?
The Subcommittee looks forward to the Federal Reserve's testimony and responses to the issues raised above.
Fernand J. St Germain
On May 14, 1986, the Subcommittee on Financial Institutions Supervision, Regulation and Insurance will continue its hearings on proposals to protect against financial institutions becoming havens for tax evaders, drug traffickers and launderers of funds derived from criminal activity.
As part of these hearings, the Subcommittee will conduct hearings on the several bills dealing with money laundering, including the Administration's bill, HR 2785. The other bills the Subcommittee intends to review are: HR 1367 (Mr. McCollum), HR 1945 (Mr. Hubbard), HR 1474 (Mr. Hughes), HR 3892 (Mr. Wortley), HR 4280 (Mr. Torres), and HR 4573 (Mr. Pickle).
The views of the Association of the Bar of the City of New York on these proposals would be of value to the Subcommittee in its deliberations. It is requested, therefore, that you appear and testify before the Subcommittee concerning these matters on May 14, 1986, at 10:00 a.m. in Room 2128, Rayburn House Office Building.
In addition to the bills mentioned above, there are four titles of the Financial Institutions Regulatory and Interest Rate Control Act of 1978 (FIRICA), also known as the Safe Banking Act of 1978, which the Subcommittee intends to review and which we feel may lend support to our efforts to fight those criminals who use our financial institutions for their illegal gains. They are Titles I, VI, VII and XI (Supervisory Authority Over Depository Institutions; Change in Bank Control Act; Change in Savings and Loan Control Act; and the Right to Financial Privacy Act, respectively).
The Subcommittee would appreciate any comments or opinions which you might have with respect to the aforementioned Titles and that you believe would provide guidance to us.
Please provide the Subcommittee with 175 copies of your testimony no later than 24 hours in advance of your appearance. Please contact Earl F. Rieger, Counsel of the Full Committee staff, if there are any questions.
Fernand J. St Germain
The Subcommittee appreciates your appearance at our hearings on May 14. Your testimony is of great assistance in our review of the Bank Secrecy Act and other pertinent issues.
There are several questions which the Subcommittee would like to have you answer and which will be submitted for the record. They are as follows
H.R. 2785 and H.R. 1367 would confer on
employees and examine records of financial
The Administration's bill (H.R. 2786)
customer's rights to privacy in their bank
In your opinion, is there a need for such a preemption provision? Are you aware of how many and what states have more protective right to financial privacy laws than the federal statute, or have documentation of how many prosecutorial opportunities were lost because of state right to financial privacy statutes?
Again, the Subcommittee is appreciative of your efforts in this area. Please submit your responses to the Subcommittee no later than June 4, 1986.