January 9, 2006

Communications Division
Office of the Comptroller of the Currency
Public Information Room
Mailstop 1-5
250 E Street, SW
Washington D.C. 20219

Attention 1557-0231

Re: Information Collection – Bank Secrecy Act/Anti-Money Laundering Risk Assessment, OMB No. 1557-0231
70 FR 73326 (December 9, 2005)

Dear Sir or Madam:

America’s Community Bankers (ACB) is pleased to respond to the Office of the Comptroller of the Currency’s (OCC) request for comment on an information collection titled “Bank Secrecy Act/ Money Laundering Risk Assessment.” The information collection would consist of a Risk Summary Form that national banks would be required to complete annually. The Risk Summary Form lists banking products and customers that are commonly associated with money laundering risk. Institutions would be required to provide the number and dollar amount of retail transactions via each listed product or category of customer.

ACB submitted a letter responding to the OCC’s September 19, 2005 request for comment on the Risk Summary Form. Since that time, the OCC issued the current request for comment and ACB received additional feedback from our members. A copy of our previous letter, dated November 16, 2005, is enclosed.

ACB Position

ACB believes the risk assessment process is the foundation of a community bank’s BSA program. We believe the OCC’s Risk Summary Form could be helpful to community banks that are conducting or updating their BSA/AML risk assessment. However, we are concerned that the form would duplicate the risk assessment that each institution is expected to conduct, therefore adding unnecessary regulatory burden. Should the OCC determine to move forward with the Risk Summary, we request that banks be required to submit the form once an examination cycle, as opposed to annually. Requiring the form to be completed annually would be unreasonable for those institutions that are subject to an 18-month examination cycle and an unnecessary regulatory burden.

Value of the Risk Assessment Form

ACB believes the BSA/AML Risk Summary Form may serve as a useful resource for community banks. While many community banks have already assessed and documented their BSA/AML risk exposure, others are finding this exercise to be very challenging.

By nature, community bankers are experts at assessing and managing risk. However, the BSA risk assessment has become a de facto compliance requirement and many institutions are unsure what is required to meet the expectations of their examiners. Community bankers are often uncertain whether they have properly identified and categorized all accounts. Many have struggled with whether a product or a customer should be rated high, medium or low or 1, 2, or 3, etc. Community bankers are also going through the process of articulating in their BSA risk assessment all of the controls in place to mitigate money laundering risk. For small community banks with limited compliance staff, this task can be particularly burdensome.

Community bank executives and their compliance staff are emphatic that more guidance on assessing and quantifying BSA risk is needed. We believe that the Risk Summary Form will help banks identify all areas in which they are exposed to money laundering risk and will help identify areas where they may have a concentration of money laundering risk.

Inefficient Use of Resources

While the Risk Summary Form may provide some utility for ACB members, we are concerned that the form will not be an efficient use of compliance resources. Although not specifically required by regulation, examiners expect banks to assess and document their risk of being used as a conduit for money laundering. The importance of the BSA risk assessment was discussed extensively at the BSA outreach meetings hosted by the agencies in August 2005. As a result, we question the utility of requiring banks to complete a form that duplicates their previous efforts.

Most community banks do not provide all of the products and services identified in the Risk Summary Form (e.g. embassy banking services, foreign charitable trust accounts, accounts for foreign offshore corporations, etc.). As a result, it might be assumed that the Risk Summary Form would not be burdensome for community banks to complete. ACB disagrees with this conclusion. First, information regarding the number and dollar volume of transactions conducted through certain categories of accounts or by certain kinds of customers may not be readily available. For example, community banks may not readily know or have the ability to estimate the number and dollar value of banking transactions conducted by non-resident aliens, travel agencies, or telemarketers.
Second, the Risk Summary is illustrative of the regulatory burden that is suffocating our nation’s community banks.

ACB members report that the continual layering of regulatory compliance requirements is increasingly difficult to manage. The cost and burden of banking regulations has been a factor in the decision of some banks to merge or be acquired. Therefore, ACB requests the OCC to review the Risk Summary in light of its duplicative nature and the cumulative regulatory burden placed on the banking industry.

Thank you for the opportunity to comment on this important matter. Should you have any questions, please contact the undersigned at 202-857-3187 or [email protected].

Sincerely,

Krista J. Shonk
Regulatory Counsel

Enclosure

cc: Mark Menchik, OMB Desk Director
Office of Management and Budget