Bartimo, Frank A., Assistant General Counsel, Manpower and Reserve Af- Leval, Pierre, former chief attorney, appellate division, southern district Morgenthau, Robert N., U.S. Attorney for the southern district of New Pollack, Irving M., Director. Division of Trading and Markets, Securities Rossides, Hon. Eugene T., Assistant Secretary of the Treasury for Enforce- ment and Operations, accompanied by Roy T. Englert, Deputy General Counsel; Robert T. Cole, Special Assistant for International Tax Affairs; Michael Bradfield, Assistant General Counsel; and Ira Tannebaum, Rossides, Hon. Eugene T., Assistant Secretary of the Treasury for En- forcement and Operations, accompanied by William Dickey, Deputy Assistant Secretary; and Robert T. Cole, Special Assistant for Inter- Somer, Clifford C., vice president, American Bankers Association, accom- Thrower, Hon. Randolph W., Commissioner, Internal Revenue Service, accompanied by Leon C. Green, Deputy Assistant Commissioner for Compliance; Bernard Meehan, Staff Assistant in Compliance; and Paul Peppler, Coordinator, Intelligence Division_. Williford, Frederick L., executive vice president, National Microfilm Asso- Ill 128 316 119 175 312 340 14 American Bankers Association, comments on Treasury Department's 335 > Committee of Foreign-Owned Banks, comments on bank secrecy legisla- Desch, Carl W., commentary on H.R. 15073.. "Eastman Kodak Division Helps Banks To Find Needle in a Hay- Page 371 322 343 351 "Microfilming Safeguards "Improving the Proof-Transit Operation," article by Arthur Van 352 W. D. Sullivan, vice president of administration, Seattle First 349 164 368 Kennedy, Hon. David M., Secretary of the Treasury, letter to Hon. National Association of Securities Dealers, Inc., statement of --- Comments on the testimony of Robert M. Morgenthau on H.R. 15073_ Advertisement of "Swiss Credit Bank," from the Wall Street Journal, "American Seized in Netherlands in Plot on HRA," article from the Comparison of Internal Revenue Service testimony, excerpts of Copies of four checks stolen and forged from the Human Resources "Errors and Omissions," editorial from New York Times, February "Eight Indicted in Alleged Plot To Defraud United States Through Letter from Hon. David M. Kennedy, Secretary of the Treasury, Letter from Hon. Eugene T. Rossides, dated February 9, 1970- 370 336 334 141 31 173 29 156 157 164 88 164 Letters to Hon. Eugene T. Rossides, dated: February 2, 1970... 166 February 10, 1970_. 89 "Report by January 31, United States Directs HRA" article from 32 Staff Report on Investors Overseas Service (IOS) and its use of secret 181 State Department telegram approved by Hon. Eugene T. Rossides, 86 "Top Swiss Court Lets U.S. Look at Bank Files," article from the Approval of State Department telegram in regard to Mutual Judicial Letters to Hon. Wright Patman: January 20, 1970 February 9, 1970.. Schoch, Dr. M. Magdalena, report entitled, "Swiss Banks and Secrecy FOREIGN BANK SECRECY AND BANK RECORDS THURSDAY, DECEMBER 4, 1969 HOUSE OF REPRESENTATIVES, COMMITTEE ON BANKING AND CURRENCY, Washington, D.C. The committee met, pursuant to notice, at 9:15 a.m., in room 2128, Rayburn House Office Building, Hon. Wright Patman (chairman), presiding. Present: Representatives Patman, Barrett, Sullivan, Reuss, Moorhead, Stephens, St Germain, Gonzalez, Minish, Hanna, Gettys, Annunzio, Rees, Galifianakis, Bevill, Griffin, Hanley, Brasco, Chappell, Widnall, Halpern, Clawson, Stanton, Blackburn, Brown, and Williams. Chairman PATMAN. The committee will please come to order. Mr. Morgenthau and Mr. Wilson, you may come around and take the witness stand, if you will, please; and Mr. Leval, will you come forward, please. This morning we begin hearings on H.R. 15073, a bill to amend the Federal Deposit Insurance Corporation Act to authorize the Secretary of the Treasury to issue regulations requiring the maintenance of certain records by commercial banks. Further, the bill requires the filing of reports and maintenance of records pursuant to regulations issued by the Secretary, by those who do business with foreign financial institutions in jurisdictions with bank secrecy laws. (The text of H. R. 15073 follows:) [H.R. 15073, 91st Cong., first sess.] A BILL To amend the Federal Deposit Insurance Act to require insured banks to maintain certain records. to require that certain transactions in United States currency be reported to the Department of the Treasury, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, 101. Retention of records by insured banks. Section 101. Retention of records by insured banks The Federal Deposit Insurance Act is amended (1) by 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) The purposes of this section are (1) to facilitate the supervision of the business of banking, (2) to aid duly constituted authorities in lawful investi (1) gations, and (3) to prevent the premature destruction of certain types of evidence having a high degree of usefulness in the establishment of civil and criminal liabilities. "(b) The Secretary of the Treasury (referred to in this section as the 'Secretary') shall prescribe such regulations as he may deem appropriate to carry out the purposes of this section. "(c) Each insured bank shall maintain such records and other evidence as the Secretary may require of the identity of each person having an account with the bank and of each individual authorized to sign checks, make withdrawals, or otherwise act with respect to any such account. "(d) Each insured bank shall make, in accordance with the regulations of the Secretary, "(1) a photocopy or other copy of each check, draft, or similar instrument drawn on it and presented to it for payment. "(2) a record of each check, draft, or similar instrument received by it for deposit or collection, together with an identification of the party for whose account it is to be deposited or collected. "(e) Whenever any individual engages (whether as principal, agent, or bailee) in any transaction with an insured bank which is required to be reported under the Currency and Foreign Transactions Reporting Act, the bank shall require and retain such evidence of the identity of that individual as the Secretary may prescribe as appropriate under the circumstances. "(f) In addition to or in lieu of the records and evidence otherwise referred to in this section, each insured bank shall maintain such additional records and evidence as the Secretary may prescribe to carry out the purposes of this section. "(g) Any type of record or other evidence required under this section shall be retained for such period as the Secretary may prescribe for the type in question." CHAPTER 2-UNINSURED BANKS Sec. 121. Congressional findings. 122. Authority of Secretary. 123. Injunctions. 124. Civil penalties. 125. Criminal penalty. 126. Additional criminal penalty in certain cases. Sec. 121. Congressional findings The Congress makes the following findings: (1) Banks not insured by the Federal Deposit Insurance Corporation (referred to in this chapter as "uninsured banks") constitute a legally significant component of the banking industry in the United States. (2) Uninsured banks make use of the means and instrumentalities of interstate commerce and directly affect such commerce. (3) The regulation by the Federal Government of the banking industry is necessary and proper in order to carry into execution the power of Congress to regulate the value of money. (4) In order to effectively regulate the banking industry' and to effectuate the purposes set forth in section 21 of the Federal Deposit Insurance Act, it is necessary and proper to confer upon the Secretary of the Treasury the authority to impose recordkeeping requirements on uninsured banks as provided in section 122 of this chapter. Sec. 122. Authority of Secretary The Secretary may by regulation require any type of uninsured commercial bank, trust company, or savings bank: (1) To make such reports as the Secretary may require in respect of its ownership, control, and management and any changes therein. (2) To require, retain, or maintain any records or other evidence of any type which the Secretary is authorized under section 21 of the Federal Deposit Insurance Act to require insured banks to require, retain, or maintain. (3) To permit the Secretary to have access to and to obtain copies of any material referred to in paragraph (2) of this section. (4) To maintain procedures to assure compliance with this chapter. For the purposes of any civil or criminal penalty, a separate violation of any requirement under this paragraph occurs with respect to each day and each separate office, branch, or place of business in which the violation occurs or continues. |