61 locations during late 1985 and reached nearly 6,000 people. In addition, we have provided speakers to participate in meetings before banking and law enforcement community groups to discuss BSA and other enforcement issues. Moreover, our BSA specialists and attorneys across the country and here in Washington respond to inquiries on a daily basis.

Fourth, we have participated in various interagency task forces and working groups and have continued to assist the law enforcement community whenever possible in their enforcement efforts. We were, for instance, instrumental in establishing a working group consisting of senior officials from our office, the Justice Department's Criminal Division, the FBI, and each of the major financial institutions regulatory agencies. The group's purpose was to improve the Federal Government's effectiveness in fighting crime in the nation's financial institutions.

The group made significant progress during 1985 and continues to operate effectively. Chief among its achievements were a variety of improvements in communications between and among the financial institutions regulators and the law enforcement community. A standard criminal referral form was designed and implemented for use by each of the supervisory agencies and all financial institutions. The form has promoted consistency in the reporting of suspected criminal offenses and has provided

Justice with a better means of tracking criminal referrals. Agreement was reached that the regulatory agencies would each adopt regulations or guidelines similar to OCC's Interpretive Ruling (12 C.F.R. § 7.5225), which requires banks to report any suspected criminal activity. We have also proposed amendments to improve our rule.

In addition, the group improved communications by identifying points of contact in each agency on the national and local level, thus establishing a network of individuals responsible for coordinating referrals and prosecutions. Specifically at OCC, District Counsel have been required to establish and maintain contact with individual United States Attorneys' Offices, FBI offices and strike forces for the purpose of coordinating criminal enforcement matters.

Moreover, to accelerate our response to law enforcement inquiries, we have formally delegated additional authority to the District Offices to respond and provide information directly. Similarly, we have worked with trade groups and

individual representatives of the banking community to

establish banking community contacts for the swift handling of problems in this area.

OCC also has enhanced its Enforcement and Compliance

Information System (ECIS) to track criminal referrals and

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improve communications.

This system generates reports that are

distributed by OCC's District Counsel to U.S. Attorneys for feedback on the status of referrals. The ECIS was recently expanded to include the most significant criminal referrals made by the other regulatory agencies and records of

disciplinary actions taken by the OCC or the other agencies against bank officials. As a result, we are now able to use

the system in our background investigations of organizers of new banks and of change in control applicants.

The working group also recommended that a joint training course

be developed to cross train FBI agents and examiners. agencies and the Department of Justice each committed resources, and a formal training course was developed. series of joint training sessions has since been held both at the FBI Academy at Quantico and at selected sites around the country.

The

A

In addition to our work with the Department of Justice working group, OCC participated actively in efforts specifically focused on improving BSA enforcement. We worked with Treasury and other financial institutions regulators to revise the uniform BSA examination procedures. These revisions, which are presently undergoing a final review at Treasury, should be implemented in the near future.

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We also vigorously supported the work of the IRS/Financial Institutions Regulatory Working Group which was created in December 1985 after the IRS was delegated additional responsibilities under BSA. This group will play an important role in facilitating communications among the agencies with BSA enforcement and compliance responsibilities, and in providing a vehicle for resolving problems. We have also developed a set

of uniform guidelines and procedures for handling BSA referrals which will create a consistent method of dealing with identified violations.

THE FUTURE

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

critical.

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 community. 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