« iepriekšējāTurpināt »
BANK SECRECY ACT ENFORCEMENT,
IN INSURED FINANCIAL INSTITUTIONS
SUBCOMMITTEE ON FINANCIAL INSTITUTIONS SUPERVISION,
REGULATION AND INSURANCE COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS
HOUSE OF REPRESENTATIVES
JAMES R. DUDINE
DIVISION OF BANK SUPERVISION
Room 2128, Rayburn House Office Building
April 17, 1986
Mr. Chairman, I am pleased to be here this morning on behalf
of the Federal Deposit Insurance Corporation (FDIC) to report
on the FDIC's enforcement of the Bank Secrecy Act and to discuss,
from the FDIC's perspective, the steps we have taken and our
thoughts on what still could be done to address the problems
the criminal element poses to this country's financial institu
We have provided the Committee with a comprehensive report on our efforts to improve compliance with the Bank Secrecy Act.
That report reveals we are finding more violations in the banks
The trend in violations is up partly because of
FDIC's strategy to focus examination resources on problem banks.
In the past three years, problem banks and banks targeted specif
ically for potential Bank Secrecy Act problems made up a greater
proportion of examinations.
Such banks would be expected to
exhibit a higher incidence of violations than a cross-section
of the banking population.
The great majority of the violations
on which the statistics in our report are based represent in
advertent failures to follow bank procedures and incomplete
or late CTR filings rather than actual failures to file CTRS.
Nevertheless, we are not satisfied with the level of compliance
by the banks we supervise and we
are continually improving our
Since this Committee held hearings last
and now cover peripheral bank services such as trust departments
and dealer departments.
Examiners will be required to follow
a stricter regimen, look closely at exemptions granted to customers,
and document their activities at various points during the examination.
in Washington, and regional presentations have been added to
reach a larger number of examiners.
The program includes infor
mation on the latest money laundering methods and instruction
on recognizing possible money laundering schemes.
We are working more closely with Treasury and IRS to improve
the flow of information and to assist each other in carrying
out our responsibilities under the Bank Secrecy Act.
Group concept has proved to be successful in improving our response
to bank fraud and insider crimes.
We hope to make similar progress
with this concept in the Bank Secrecy Act area.
We are making more and better use of external targeting of institu
tions for Bank Secrecy Act reviews. The Customs Service's analysis of currency flows and cash shipments of individual banks and bank-to-peer group relationships provides regulators with an intelligent way to select banks for examination. We strongly
support the work being done in this area.
Because the safety and soundness of insured banks is of utmost
importance to the FDIC, the resources we can allocate to Bank
Secrecy Act compliance are limited.
Thus, the method of selecting
banks to be examined is very critical to our overall enforcement
In addition to targeting banks based on information
from the Treasury Department, IRS or the Customs Service, the
idea of examining a random sample of banks each year is being
This approach adds flexibility to our enforcement program and permits us to respond quickly to potential
As we have stated in the past, bank supervision and examination
procedures cannot assure day-to-day compliance with currency
During the past fifteen months, we have given a lot of attention
to improving our efforts to deal with the criminal conduct of
We are very encouraged by the progress being
made by the Bank Fraud Working Group. The Group was organized
under the interagency agreement signed in April 1985 to improve
cooperation between bank regulators and law enforcement agencies in responding to the criminal threat to insured financial insti
Similar progress in dealing with the criminal aspects
of money laundering is possible under the current legal environment.
However, the government's response to the problem would be strength
ened by making money laundering a federal crime.
and other bills address this fundamental weakness and would
permit prosecutors to attack organized criminals directly--by making money laundering the crime--rather than having to build
their cases on failures to file currency reports.
a federal crime of money laundering and generally agree with
the higher penalties and stiffer sentences contained in H.R.