Posted on 06/30/2008 10:43:26 AM PDT by BGHater
Florida banks say they are tired of playing cops, and some congressional leaders agree.
The Florida Bankers Association (FBA) issued a statement Thursday in support of 18 members of Congress who signed a letter asking bank regulatory agencies to ease off on their enforcement of bank-related provisions of the Patriot Act and the Bank Secrecy Act. Parts of the two laws require banks to report the suspicious activity of their customers, especially when conducting international business.
The FBA's letter said it has seen very little evidence that banks' reports on potential criminal behavior have deterred such activity or led to actual arrests.
"Banks are spending millions upon millions of dollars in compliance costs," FBA President Alex Sanchez said. "If it keeps going like this, we'll spend more money on compliance than on the actual business of banking."
Some banks have received cease-and-desist orders from federal regulators because they didn't fully comply with the laws, even though the regulators pointed out no instances of illegal activity. The congressional letter noted that bankers are now, in effect, policeman, and could face serious punishment from regulators if they fail in these duties. It also said the requirement to know the political and personal backgrounds of foreign customers has driven U.S. banks out of international markets.
"While each of the mandates may make sense to those who are focused on the goal of dealing with drugs or terrorism, we do not believe that anyone has stopped to analyze the cumulative effect of all these initiatives on the health of the nation's banking system and its ability to carry out its fundamental functions," the letter said.
After reviewing the letter, Office of Thrift Supervision spokesman William Ruberry said Director John Reich believes strongly on striking the right balance on Bank Secrecy Act enforcement. He said he's working on a response to the congressional letter.
The Federal Deposit Insurance Corp., the Federal Reserve Board, the Office of Comptroller of the Currency and the Financial Crimes Enforcement Network were also addressed in the letter.
Our company has to deal with this BS every day. We now have to keep an attorney on retainer just to deal with the Patriot Act and the Bank Secrecy Act.
Simple. Just come up with a computer program that reports EVERY SINGLE TRANSACTION. You can’t get accused of not being suspicious enough of your customers, it will choke the logistics of the reporting system, and the sheer volume of the data will partially restore the privacy of your customers, which the government had no business tampering with. AND, since it’s both routine and automated rather than manual and exception driven, it might even cost the bank less than it does now to “comply”.
Are these laws hangovers from the crackdown on illegal drug money pouring in? Back in the early 80s there was a huge shake up/convictions for money laundering
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.