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ICBA Urges Balanced Approach to Bank Secrecy Act Compliance

Focus on Risk, Exempt 'Seasoned Customers'

Washington, D.C. (May 10, 2007)—The Independent Community Bankers of America (ICBA) commended the House Financial Services Subcommittee on Oversight & Investigations for examining the costs and regulatory burden stemming from the Bank Secrecy Act (BSA).

"Community bankers support balanced, effective measures that stop terrorists from using the financial system to fund their operations and prevent money launderers from hiding the proceeds of criminal activities," Mike Menzies, ICBA vice chairman and president and CEO of Easton Bank and Trust Co., Easton, Md., said during a subcommittee hearing today on BSA. "However, ICBA strongly urges the federal government to recognize the costs and burdens that these requirements place on community banks and to find ways to streamline requirements so that community banks can use bank resources to better serve our customers and communities."

Menzies urged Congress to advance legislation that focuses on a risk-based approach to combat money laundering and terrorist financing while helping alleviate the burden for community banks. The nation's community banks play a critical role in these efforts, but their efforts should focus on the greatest risks, not on reporting routine transactions which are costly and burdensome to produce but do little to assist law enforcement. The ICBA-supported bill, the Seasoned Customer Currency Transaction Report Exemption Act of 2007 (H.R. 323), which has passed the House and is awaiting action in the Senate, is a step in the right direction.

Community bankers across the country say the Bank Secrecy Act is one of the most burdensome areas of compliance, and ICBA believes the balance of costs and benefits needs to be restored. ICBA looks forward to working with Chairman Barney Frank (D-Mass.), Ranking Member Rep. Spencer Bachus (R-Ala.) and other members of the House Financial Services Committee to find solutions that reduce the BSA compliance burden while meeting the needs of law enforcement to protect America's communities.

For ICBA's complete testimony, go to www.icba.org.