Lapas attēli


tion item. Testimony given before the House committee indicated a trend in banks toward fewer records. This is clearly not the case with our Clearing House banks. However, it is hard to see what purpose would be served, for example, by requiring that the more than 3 million dividend drafts issued each quarter by A. T. & T. be microfilmed by the bank on which they are drawn. We still feel that the record retention provisions should be restricted to international transactions. As we indicated to the House committee we believe it entirely appropriate to maintain for a period of 6 years specific categories of records relating to international transactions, which Mr. Rossides testified would be useful, including records of: Remittances transferring funds abroad; remittances transferring funds to the United States; checks negotiated abroad and foreign credit card purchases; foreign checks transmitted abroad for collection; foreign drafts and letters of credit and documentary collections.

It should also be pointed out that none of the expert witnesses who testified before the House committee made clear how the requirement for domestic recordkeeping would have helped in detection or prosecution of the crimes which were described. Moreover, next to no attention was given to the vastly complex question of retrieval. The retrieval problem would not be insignificant if title I were limited to international transactions, but a workable system for the retrieval of billions of domestic records called for by title I simply would not be compatible with the functioning of today's banking system.

I should now like to turn briefly to titles III and IV, both of which affect the securities industry as well as the banking industry. We understand at representatives of the securities industry will be appearing before you, and we do not wish to go over ground which those witnesses will cover.

Title III, however, perhaps represents an overreaction to a suggestion we made to the House Banking Committee and I should therefore like to say something about it. In our earlier testimony, we noted that margin requirements do not currently apply to loans made abroad, despite the contrary inferences which the committee might have drawn from the testimony of some of those who appeared before it, and we suggested that the Securities Exchange Act "might be amended to forbid resident American citizens from borrowing on margin abroad to purchase regulated U.S. securities on more favorable terms than they could borrow here.” The language which now appears in title III could, however, authorize the Federal Reserve Board to regulate borrowings by foreign citizens from foreign banks, transactions which no principle of international law would permit Congress to regulate. In our memorandum we suggest language which would carry out our original, and properly limited, recommendation.

Title IV will in all probability significantly reduce the volume of U.S. securities held by foreigners. Domestic banks perform many agency services for foreign banks, the most important of which is acting as custodian of U.S. securities. Based on past experience, we believe it is highly unlikely that foreign banks will be willing, or in some cases legally permitted to make the certification required by title IV. If this title is enacted, it is almost certain that a substantial part of the funds now invested by foreign financial agencies would be withdrawn from U.S. securities markets and some shares now held abroad would


[ocr errors]

be traded only on foreign exchanges, thus reducing the liquidity of the American market.

In concluding my remarks I would like to reemphasize our desire to be cooperative in this legislative effort. I am sure that this subcommittee is at least as concerned as we are over the invasion of privacy and foreign trade aspects. The regulation and implementation problems are not as serious but nevertheless do present problems which should be solved. The adverse effect of title IV, as presently drafted, on our securities markets would be most unfortunate, particularly at the present time. As I stated at the outset, a paper with suggested language changes is attached to my written statement and I hope you will find it helpful, and it will be made a matter of record.

Senator PROXMIRE. That indicates the amendments that you would like to have written in the bill, and it is helpful. Without objection that bill as highlighted with your amendments will be printed in the record at this point.

(The bill follows:)

[merged small][ocr errors][merged small][merged small][merged small][merged small]

To amend the Federal Deposit Insurance Act to require insured

banks to maintain certain records, to require that cer-
tain transactions in United States currency be reported
to the Department of the Treasury, and for other purposes.

[blocks in formation]
[blocks in formation]

Retention of records by insured banks.
Retention of records by insured institutions.

S 101.


of records by insured banks

The Federal Deposit Insurance Act is amended (1) by


New Matter Underscored. Matter to be deleted is Struck Through

redesignating sections 21 and 22 as 22 and 23, respectively,

and (2) by inserting the following new section immediately

after section 20.

"Sec. 21. (a) (1) The Congress finds that adequate

records maintained by insured banks have a high degree of

usefulness in criminal, tax, and regulatory investigations

and proceedings.

The Congress further finds that photocopies

microfilm or other reproductions made by banks of checks, as

well as records kept by banks of the identity of persons main

taining or authorized to act with respect to accounts therein,

have been of particular value in this respect.


It is the purpose of this section to require

the maintenance of appropriate types of records by the United

States offices of insured banks where such records relate to a

function performed within the United States and may have a high

degree of usefulness in criminal, tax, or regulatory investi

gations or proceedings relating to United States laws and


" (b)

The Secretary of the Treasury (referred to in

this section as the 'Secretary') shalt may prescribe such

regulations as are appropriate to carry out the purposes of this



Each insured bank shall maintain such rec

ords and other evidence as the Secretary shati may require

of the identity of each person United States citizen or

resident having an

a deposit type account with any domestic

office of the bank and of each individual authorized to sign

checks, make-withdrawats7-or-otherwise-aet or other payment

[blocks in formation]

or-other-copy of each check, draft, or payment order or

similar instrument drawn-on-it-and-presented-to-it-for-pay

ment forwarded to it for collection from outside the United

States if it is the first insured bank to receive such check,

draft or instrument in the United States for collection; and

" (2)

a record microfilm or other reproduction of

each check, draft, or similar instrument received by it for

deposit or collection, together-with-an-identifieation-of-the


untess-the-bank-has-atready-made-a-record-of-the-party-s-identity pursuant-to-subseetion-tet if such check, draft, payment order

or similar instrument is drawn on a bank or similar institution

outside the United States and such insured bank is the last

« iepriekšējāTurpināt »