April 17, 2006

Mr. Eric Kringel
Senior Policy Advisor
Financial Crimes Enforcement Network
Post Office Box 39
Vienna, VA 22183

Re: Financial Institution Survey Regarding Cross-Border Electronic Transmittals of Funds

Dear Mr. Kringel:

America’s Community Bankers (ACB) is pleased to respond to the Financial Crimes Enforcement Network’s (FinCEN) feasibility study regarding cross-border electronic transmittals of funds. FinCEN is evaluating whether it would be appropriate for financial institutions to report information about cross-border funds transmittals. It is also studying the impact that such a reporting requirement would have on the financial services industry. This study is required by the Intelligence Reform and Terrorist Prevention Act of 2004.

ACB requested members of three ACB committees to complete FinCEN’s survey. The committees were:

• Regulation and Compliance Committee
• Retail Banking, Operations, Security & Technology Committee; and
• Electronic Banking and Payment Systems Committee.

The bankers that participate on these committees were the most appropriate persons within their institutions to review and complete the survey. Nevertheless, the response rate to the survey was very low. This may be attributable to a multiple factors, including:

• The length of the survey.
• The degree of internal research required to respond to the survey.
• The short time to respond to the survey.
• Limited staff time due to regulatory demands placed on community bank compliance and operations employees.

While the responses we received do not represent a statistically valid sample of ACB’s membership, we were able to discern possible trends within the community banking industry and received pertinent comments from ACB members who engage in cross-border transactions. The following are some general comments regarding community bank involvement in cross-border transactions.

• The volume and dollar value of cross-border transactions originated by community banks varies significantly across the community banking industry.
   
• Most community banks that provide cross-border transfers provide this service only to their customers.
   
• Most community banks use a correspondent bank to provide cross-border transactions. As a result, most community banks do not deal directly with institutions located outside of the United States. Any reporting requirement should be limited to institutions that transmit funds directly to a foreign bank. The Department of the Treasury would still receive data about cross-border transfers originated by community banks, but that information would come from the correspondent. This approach would avoid placing additional regulatory burdens on community banks whose resources may also often be constrained.
   
• Community banks believe that the additional reporting requirements will add additional time to the processing of these transfers and that the requirements would be labor intensive.

FinCEN will weigh many factors as it analyzes the survey results and determines whether to impose additional reporting requirements on financial institutions. We specifically request FinCEN to consider the cumulative regulatory burden shouldered by the nation’s community banks and to balance any new compliance requirements with the size and capacity of the depository institution.

Thank you for the opportunity to assist in collecting information regarding cross-border transfers. Should you have any questions, please contact the undersigned at 202-857-3187 or [email protected].

Sincerely,

Krista J. Shonk
Regulatory Counsel