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ICBA Cautions Against Lowering Threshold for Wire Transfers

Washington, D.C. (August 10, 2006)—The Independent Community Bankers of America (ICBA) told the Federal Reserve and the Financial Crimes Enforcement Network (FinCEN) that reducing the dollar threshold for recordkeeping requirements on wire transfers will increase the burden on the nation's community banks without enhancing law enforcement efforts.

"The increased burdens of a reduced or eliminated threshold could be significant if the volume of wire transfers increases in the future," ICBA said in a comment letter to the federal agencies. "Changing the threshold would eliminate flexibility and the ability of banks to manage operations."

Most community banks use similar recordkeeping procedures for all wire transfers to simplify compliance. However, since most community banks use manual procedures to keep the required records, changing the threshold would eliminate flexibility and make it difficult for banks to provide cost-effective services as volumes increase, especially for international remittances.

Currently, banks must maintain and include information on the identity and account information of the sender and recipient for wire transfers of $3,000 or more. Based on the recommendation of an international task force, FinCEN and the Federal Reserve are evaluating whether to reduce or eliminate the threshold.

ICBA and its members are committed to helping the federal government and law enforcement agencies stop money laundering and terrorist financing, but ICBA sees no benefit to changing the current threshold for wire transfers. Because community banks identify Bank Secrecy Act regulations as one of the most burdensome compliance areas, ICBA asks the agencies to carefully assess the benefits laid out by law enforcement agencies against the increased costs and burdens to community banks, especially the possibility that increased costs could drive smaller dollar transactions underground.

Read the complete comment letter at www.icba.org.