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ICBA Calls for FinCEN to Further Reduce ‘Exemption Process’ Paperwork

Washington, D.C. (June 24, 2008)—The Independent Community Bankers of America (ICBA) welcomed the Financial Crimes Enforcement Network (FinCEN) proposed effort to streamline the agency's exemption process for filing currency transaction reports (CTRs), but said further changes are needed before community banks will make greater use of the exemption process. FinCEN is proposing to amend the rules governing how banks exempt customers from filing the reports on large currency transactions and reduce the volume of CTRs.

"Community banks are increasingly willing to use the exemption process," said Robert Rowe, ICBA senior regulatory counsel, in a comment letter to FinCEN. "Anecdotal feedback indicates that more community banks are using the process - but only to a limited extent. ICBA supports the proposal since it may encourage community banks to expand the use of the exemption process but more will have to be done."

ICBA wrote that the proposal will not appreciably reduce the two barriers that currently prevent community banks from making more extensive use of the exemption process:

  • It will not substantially streamline the overall process as community banks will still need to document and maintain internal procedures to support exemptions.
  • It does nothing to eliminate "regulator risk" of examiner scrutiny and possible criticism for inadvertent errors or possible failure to adhere to complex requirements.

"Community banks do not believe the benefits outweigh the risks and costs associated with using exemptions," said Rowe. "The proposal does not change that equation. Until the exemption process becomes simpler and less burdensome than filing a CTR, community banks are not likely to use the process."

Read ICBA's comment letter to FinCEN at www.icba.org.