CUNA Comment Letter

PRA Comments – Cross Border Survey

April 14, 2006

Eric Kringel
Financial Crimes Enforcement Network
P.O. Box 39
Vienna, VA 22183

Dear Mr. Kringel:

The Credit Union National Association (CUNA) appreciates the opportunity to provide feedback, on behalf of our credit union members, on the cross border electronic transmittals of funds (transfers). By way of background, CUNA is the largest credit union trade association, representing 87% of our nation’s 8,900 state and federal credit unions, which serve nearly 87 million members.

As mandated by Congress, the Treasury, through the Financial Crimes Enforcement Network (FinCEN), is seeking input from trade groups representing members of the U.S. financial services industry on the feasibility of requiring reporting of cross border electronic transmittals of funds, and the impact such reporting would have on the financial services industry.

CUNA commends FinCEN for seeking input from credit unions and other financial institutions through trade groups on the feasibility of reporting certain information on cross border transfers and support efforts to combat money laundering and terrorist financing.

However, mandating that financial institutions must segregate cross border transfers from domestic transfers may be problematic, especially for smaller institutions. Smaller credit unions typically send and receive wire transfers through a correspondent, which is generally a corporate credit union or larger financial institution. When a transfer is received by a correspondent, the domestic and cross border transfers are not distinguished. Credit unions would need to establish procedures that would differentiate cross border transfers from domestic transfers and maintain this information in a separate database for reporting purposes.

In addition to procedures to segregate cross border transfers, credit unions would need to establish additional recordkeeping procedures to implement any reporting requirements. Currently, some credit unions, typically those with smaller assets, maintain records by filing wire information by account number in members’ account histories, rather than by date. This enables credit unions to retrieve information on a particular account, including any electronic transfers as needed. This information is typically requested in response to government subpoenas, which tend to request specific account information and transaction histories rather than requesting cross border transfer information on particular dates. If cross border transfer information would be required to be reported, data processing systems would need to be upgraded to enable credit unions to retrieve the required information. This may be challenging for smaller credit unions, particularly those using a third party, such as a corresponding institution, to complete the transfer.

Thank you for the opportunity to comment on these important issues. Please contact me at 202-508-6733 or LThomas@cuna.coop if you have any questions or would like to discuss the impact cross border transfer reporting would have on credit unions.

Sincerely,

Lilly Thomas
Assistant General Counsel