The Treasury Department has responded to concerns expressed by ICBA and America's Community Bankers about the burden on community banks of the terrorist financing and money laundering data-matching requests under section 314(a) of the USA PATRIOT Act. Responding to our joint letter, FinCEN Director Jim Sloan stressed that community bankers "play a key role in ensuring that this system functions in the best manner possible," and said that "the current operating parameters of the system reflect a balance between meeting law enforcement's needs and easing the burden on the financial community."
Sloan described recent improvements to the system that resulted from FinCEN "listening to the concerns raised by representatives of the financial community such as yourselves." The majority of requests to date (75%), Sloan said, have adhered to limitations designed to minimize burden. Generally, requests are sent every two weeks and banks are given two weeks to respond. Sloan acknowledged that there are instances when expedited responses have been requested, but he assured the ICBA that those requests are limited to critical cases and "subject to careful vetting" by senior law enforcement and FinCEN officials. One such request involving ongoing terrorist financing resulted in positive results from 33 banks, Sloan said.
Search requests will be limited to records banks must otherwise legally maintain, although the volume of requests and use of the data-match program appears to be leveling off. FinCEN has been taking additional steps to alleviate burden, such as providing an index of names in a tab-delimited file and targeting requests geographically. Bundling requests into a single attachment is not possible at present, but FinCEN is reviewing "available technology" to improve the system.
To show banks that the system is producing results for law enforcement, FinCEN plans to publish response rates and other case information in the next SAR Activity Report. Sloan concluded by stressing FinCEN 's commitment to balance the burden on banks with the benefits to law enforcement, and welcoming continued dialogue from the ICBA and the industry.