CUNA Comment Letter
Proposed Rule on Implementation of the CARD Act
December 16, 2009
Financial Crimes Enforcement Network
Department of Treasury
Attention: Special Information Sharing Procedures To Deter Money Laundering and Terrorist Activity
P.O. Box 39
Vienna, VA 22183
|RE:||FR Doc. E9-27447 Expansion of Special Information Sharing Procedures To Deter Money Laundering and Terrorist Activity|
To Whom It May Concern:
The Credit Union National Association (CUNA) appreciates the opportunity to comment on the Financial Crime Enforcement Network's (FinCEN's) notice and request for comments on the proposed expansion of the information sharing rules under Section 314(a) of the USA Patriot Act ("Section 314(a)"). By way of background, CUNA is the largest credit union trade organization and represents approximately 90 percent of our nation's 8000 state and federal credit unions, which serve more than 92 million members.
SUMMARY OF CUNA'S COMMENTS
- CUNA is apprehensive about FinCEN's proposed rule to provide access to the Section 314(a) information sharing process to certain foreign law enforcement agencies, as well as state and local law enforcement agencies due to concerns we have regarding the burden this proposal would impose on our members.
- CUNA does not believe that the burden estimates provided in the proposal adequately reflect the burden that would result from this expansion. As such, we believe that FinCEN should engage in additional industry outreach to fully gauge the impact of broadened access to the Section 314(a) process.
Currently, Section 314(a) information sharing rules allow FinCEN, on behalf of federal law enforcement, to require financial institutions to search their records to determine if they have maintained an account or conducted a transaction with a person that a federal law enforcement agency has certified is suspected of engaging in terrorist activity or money laundering. Prior to processing the agency's request, FinCEN requires the agency to certify, in the case of money laundering, that the matter is significant and the agency is unable to locate the desired information through traditional investigative and analytical means.
FinCEN is proposing to amend the Section 314(a) rules to allow certain foreign law enforcement agencies, as well as state and local law enforcement agencies to submit information requests to financial institutions. The proposal also clarifies that FinCEN may submit Section 314(a) information requests, on its behalf and on behalf of other appropriate Treasury components, to financial institutions.
FinCEN suggests that providing this expanded access to the Section 314(a) process would be beneficial in two ways: (i) it would encourage reciprocal information sharing between law enforcement agencies in the United States (U.S.) and the European Union (EU), and (ii) it would help state and local law enforcement fill in information gaps in their investigations.
Initially, FinCEN restricted Section 314(a) access to federal law enforcement agencies due to concerns about the potential burden on financial institutions. However, FinCEN has recently determined that the industry has implemented the necessary changes to accommodate Section 314(a) requests in a more efficient fashion. Therefore, FinCEN believes the burden accompanying this expansion would be minimal.
Under the proposal, a law enforcement agency must certify (before submitting a Section 314(a) request) that (i) it is seeking information on a target reasonably suspected of engaging in terrorist activity or money laundering and that this suspicion is based on credible evidence, (ii) it is not able to obtain this information through traditional investigatory and/or analytical means, and (iii) in money laundering cases, it is investigating a "significant" matter. FinCEN suggests that the certifications will effectively limit Section 314(a) access to only the most appropriate investigations.
As you are well aware, this has been a year filled with regulatory developments that have taxed the resources of financial institutions. And, while we can certainly appreciate the benefits this proposal will bring to law enforcement and the value this expansion can bring to
the investigatory process, we are concerned that not enough attention has been given to assessing the burden this expansion would place on financial institutions.
In light of our concerns about the regulatory burden, CUNA is apprehensive about the proposal. FinCEN proffers that an estimated annual burden of 72 hours per institution would be required to handle these requests, however, we are not sure that the proposed implementation estimates realistically depict the impact of this proposal on our members. For instance, many of our smaller institutions do not have the monetary resources to automate their processes. As a result, search requests would take significantly longer in a manual environment.
In addition, there are a couple of issues that could be further clarified. For example, additional detail would be helpful concerning which "appropriate Treasury components" would have access to the 314(a) process and under what circumstances. Also, whether or not FinCEN is willing to revisit the appropriateness of this expansion in the event that the burden to financial institutions is greater than anticipated. We suggest that FinCEN engage in additional industry outreach, beyond the proposal comment period, to better gauge the impact to the industry.
Thank you for the opportunity to provide comments on the proposal. If you have any questions about our comments, please contact Senior Vice President and Deputy General Counsel Mary Dunn or me at (202) 508-6739.
Federal Compliance Counsel