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Floor Statement For Immediate Release: January 23, 2007 REP. FRANK FLOOR STATEMENT ON SEASONED CUSTOMER CTR EXEMPTION ACT OF 2007 (House of Representatives - January 23, 2007) --- Madam Speaker, this is an example of sensible regulation because sensible regulation includes deregulation when that is appropriate. The Committee on Financial Services reported this bill out last year. It passed the House. Surprisingly it managed not to make it through the Senate. The efficiency of that body failed us on this occasion apparently, but we are going to try again. We believe in regulation, and this is an important area where we provide information to our financial detectives, and it is especially important with regard to terrorist financing. But too much regulation can defeat the purpose for which regulation is intended, and we have a situation now where the banks are required to report every year on customers' transactions of $10,000 or more. Now, one of the things this bill would do is give the Secretary of the Treasury the authority to increase a dollar figure that has been left unadjusted for inflation for too long. More importantly, we are talking now about the exemption that is given to what we call seasoned customers of the bank. When the banks are dealing, and this is particularly important for our community bankers, when they are dealing with people whom they know, with whom they have had regular and continuing relationships, having to report every time they do a transaction of $10,000 or more generates extra work for the bank, and I believe, if anything, interferes with the ability of the regulators to find what they should be looking for. If we are telling people to find needles, we should not set about building them bigger haystacks. What this bill says is that where we are talking about regular customers, regular seasoned customers, they can apply for the exemption, which is in the control of the Secretary of the Treasury, with careful criteria. And having received that exemption, as long as they remain seasoned customers of the same bank, that process does not have to be repeated every 2 years. It reduces the regulatory burden on banks, and it is particularly important to small banks. I would ask at this point, Madam Speaker, under my general leave to include a letter to myself and the gentleman from Alabama from America's Community Bankers strongly endorsing this bill. AMERICA'S COMMUNITY BANKERS Washington, DC, January 22, 2007. Dear Chairman Frank and Ranking Member Bachus: America's Community Bankers is pleased to support H.R. 323, the Seasoned Customer CTR Exemption Act of 2007. The legislation would make important improvements to the current exemption system for cash transaction reports (CTRs) by making it easier to exempt the routine transactions of certain seasoned business customers. H.R. 323 would more appropriately balance the cost and benefits of the Bank Secrecy Act's CTR reporting requirements. The legislation would also reduce the number of CTRs filed on routine transactions of well-known, law abiding customers. We urge the full House of Representatives to adopt H.R. 323 and look forward to working with you to enact this important legislation. While we fully support H.R. 323, we urge the Committee to modernize the Bank Secrecy Act further by increasing the $10,000 threshold that triggers CTR filing. This threshold has not been updated since 1970. Increasing the $10,000 trigger would more appropriately balance the reporting obligations of depository institutions and the information needs of law enforcement agencies. Sincerely, Executive Vice President and Managing What this will do is to reduce the paperwork burden on the banks; it will ease the burden on the regulators. It will not diminish in any way the flow of information that is needed for those whose job it is to keep us safe. |
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