CUNA Regulatory Comment Call

February 11, 2009

EXECUTIVE SUMMARY

• The Financial Crimes Enforcement Network (FinCEN) proposes to move the Bank Secrecy Act (BSA) regulations to a new chapter (Chapter X) in the Code of Federal Regulations.
• The proposed rule will not result in any substantive changes to the BSA regulations.
• The new chapter will reflect the BSA regulations, organized by financial industry. By moving the BSA regulations to a new chapter and organizing them by financial industry, FinCEN hopes to create a more user-friendly way to locate regulations applicable to a particular industry. The BSA regulations will be renumbered in the new chapter in a manner that would make it easier to find regulatory requirements than under the current numbering system.
• FinCEN also proposes to make minor technical changes to the BSA regulations such as updating mailing addresses and points of contact.
• Comments on the proposal are due to FinCEN by March 9, 2009. Please send your comments to CUNA by February 25, 2009. Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to SVP/Deputy General Counsel, Mary Dunn at mdunn@cuna.com or to Federal Compliance Counsel, Nichole Seabron at nseabron@cuna.com or mail them to Mary or Nichole in c/o CUNA's Regulatory Affairs Department, 601 Pennsylvania Avenue, NW, 6th Floor - South Building, Washington, DC 20004-2601. You may also contact us if you would like a copy of the FinCEN proposed rule or you may access it here .

DESCRIPTION OF THE PROPOSED RULE

• Chapter X will be divided into a number of Parts. In the new chapter structure, definitions and regulatory obligations applicable to all or a number of regulated persons/financial institutions will be located under "General Provisions". If a regulatory obligation found under "General Provisions" is applicable to a particular industry, the industry-specific section will contain a cross-reference to the appropriate "General Provisions" section.
• Regulatory obligations applicable to particular industries will be broken out into industry-specific sections i.e. credit unions/banks, casinos, money services businesses, etc.
• FinCEN's proposed renumbering logic is designed to provide consistency and ease of access. By implementing consistent numbering and division of sections within subparts, regulatory requirements will be easier to find. Each regulatory section contains subpart topics that are consistent across all sections. For example, subpart "A" refers to definitions; subpart "B" refers to program requirements; subpart "C" refers to reporting requirements; and subpart "D" refers to recordkeeping requirements.
• General BSA definitions will be found under "General Provisions". Definitions specific to a particular financial industry will be found in subpart "A" of the applicable financial industry section.
• FinCEN proposes a definition for Bank Secrecy Act (BSA). Currently, the acronym "BSA" and the term "Bank Secrecy Act" have not been defined. The Bank Secrecy Act will be defined as the Currency and Foreign Transactions Reporting Act, its amendments, and the other statutes relating to the subject matter of that Act, that have come to be referred to as the Bank Secrecy Act.
• Part 1010 of Chapter X, "General Provisions", will contain the generally applicable regulatory provisions of the Bank Secrecy Act and the USA Patriot Act. This Part is divided into a number of subparts:
  • Subpart A : General definitions
  • Subpart B: Programs
  • Subpart C: Reports required to be made by financial institutions
  • Subpart D: Records required to be maintained by financial institutions
  • Subpart E: Special information sharing procedures (money laundering and terrorist financing)
  • Subpart F: Special standards of diligence; prohibitions; and special measures
  • Subpart G: Administrative rulings
  • Subpart H: Enforcement; penalties; and forfeiture
  • Subpart I: Summons
  • Subpart J: Miscellaneous
• Part 1020 of Chapter X will contain regulatory provisions specific to credit unions and banks.
• FinCEN is taking a tiered approach to moving the BSA regulations from 31 CFR 103 to Chapter X. As part of this tiered approach, FinCEN intends to publish a subsequent notice of proposed rulemaking with any revisions or deletions necessary to move the Appendices to Chapter X.

QUESTIONS REGARDING THE PROPOSED RULE

(FinCEN has specifically asked for comments on the first two questions below)

1. Will the structure and numbering logic of the sections and parts within Chapter X make the FinCEN regulations more easily accessible?
   
   Yes ____ No _______
   
   If not, what structure should be used to organize the new chapter?
   
   

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2. Whether organizing the new chapter based on an alphabetical scheme is clear, effective and of such value that FinCEN should reorganize the definitions at this time and each time a new one is added?
   
   Yes ____ No _______
   
   If not, what organization scheme would be more useful?
   
   

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3. Do you think there are any additional technical changes that can be made to the current BSA regulations to make them more accessible and easier to use?
   
   

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