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MONEY ORDER AMOUNT SURVEY
Conducted during the week of May 5, 1986
Five Federal Home Loan Banks each contacted five member institutions and asked: (1) do they have a limit on the size of a money order they will sell, and if there is a limit, what is the maximum dollar amount, and (2) what is the typical size, or range of amounts, of money orders sold.
The Subcommittee appreciates your appearance at our hearings last Thursday. 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:
Both you and Mr. Serino, of the office of the
abusing the privacy rights of the legitimate customer?
concerning names and businesses which may inappropriately appear on a financial institution's exempt list, presently, how does your agency ensure that appropriate entities are on such lists? Assuming there is an unqualified name or business
on such a list, what types of enforcement action would your agency pursue ? At present, would civil or criminal liability be possible against either the financial institution or its exempted customer for inappropriately appearing on such a list?
Should the term "monetary instruments" in the Bank Secrecy Act and its regulations be amended to include "postal money orders" in order to include them under the requirements of the Act and its regulations?
Has any thought been given to the use of the civil
In your testimony, you explained what financial
Again, the Subcommittee is appreciative of your efforts in this area. Please submit your responses to the Subcommittee no later than May 7, 1986.
Helnand J. St Germain
JUN 17 1805
The Honorable Fernand J. St Germain
Rayburn House Orlice Building, Room B-303
JUIN 24 1993
In your letter to Mr. Percy Woodard, Jr. or April 25, 1984, you presented five questions in connection with his bcuta mai raiutions April 17, 1986. The following is our response to your questions.
Both you and Mr. Ser ino, of the Orlice or the Comptroller or
the privacy rights of the legitimate customer?
The Internal Revenue Service does not have authority under the Bank Secrecy Act (BSA) to issue a summons to those financial institutions under its jurisdiction. Summons authority is necessary for two situat ions. The most common is the instance where a financial institution is cooperative, but requests a summons as a means of protecting itselr rrom possible suits by its customers. The other type of situation is where an institution declines to cooperate by providing us with access to the appropriate books and records in order to determine if it is complying with the reporting and recordkeeping requirements of the BSA. These situations would be corrected by providing the summons authority proposed in H.R. 2785 and 2786.
The summons authority would permit the examination or records and testimony for the purposes of investigating BSA violations. The records of the customers would be accessible solely for the purposes of determining the institution's compliance with the BSA, The incidental review of individual customers would be analogous to the review of such records by bank examiners; the rocus is on the actions or the institution, not the customer.
The Honor able Fernand J. St Germain
While we have not drafted specific written criteria, income tax compliance activities would have to be generated from filed CTRs. is a financial institution's records were then desired ror a tax investigation relating to a particular customer, a summons would have to be served under the provision of Title 26 to gain access to the records. Question 2.
Concerning names and businesses which may inappropriately
The IRS monitors the propriety of exemptions by requesting and reviewing exemption lists from financial institutions (some unsolicited lists are also received). We are also assisted by the review functions performed by other regulatory federal agencies that conduct compliance checks. The following is a summary or what the Service does in the way of ensuring that listed exemptions are proper.
The Service has the authority to direct banks to remove entities from the list and to file CTRs for the preceding 5-year statutory period. Where an unqualified business is found on an exemption list, we would direct removal and, is useful, require the riling or delinquent CTRs. Ir warranted, a referral to our Criminal investigation function would be made. Our Criminal Invest igat ion function has the authority to conduct investigations or criminal violation (s) or any bank.
Also, other supervisory agencies in conjunction with their compliance checks can direct a bank to remove an entity from the exemption list. In these situations, the bank is usually directed to apply for a special exemption and request the Service's advice on the need to file delinquent CTRs.