Sept. 27, 2010, 4:18 p.m. EDT
http://www.marketwatch.com/story/white-house-proposes-new-bank-transfer-reports-2010-09-27
Treasury seeks information to fight money laundering, terrorism
WASHINGTON (MarketWatch) — The Obama administration on Monday introduced a proposal that would require hundreds of banks and money-service businesses including Western Union Co. to report cross-border financial transactions, as part of an effort to combat money laundering and terrorism.
“We’re trying to catch the drug dealers, money launderers, transnational organized crime and tax evasion,” said Steve Hudak, spokesman for the Financial Crimes Enforcement Network, a division of the Treasury Department.
The proposal would require depository-institution banks that conduct cross-border transactions to report international financial transactions of all sizes. Certain money-service businesses, such as Western Union /quotes/comstock/13*!wu/quotes/nls/wu (WU 17.77, +0.12, +0.66%) , would be required to report international transactions equal to or in excess of $1,000.
Currently, banks and money-service firms that conduct cross-border transactions are required to keep records for transactions at $3,000 or more.
The Financial Crimes Enforcement Network estimates that fewer than 300 banks and about 700 money-service businesses will be subject to the requirement. Division spokesman Steve Hudak said banks preferred to provide all their cross-border transactions rather than those above $3,000 because it would be “easier and less expensive” to do that.
He added that the new disclosures, when they become effective, can be cross-referenced with suspicious-activity reports and currency-transaction reports that U.S. financial institutions are required to make. U.S. financial firms are required to report transactions to Treasury that are $10,000 or more.
Hudak also said that he doesn’t expect the rule to be adopted until early next year, and that it isn’t expected to be effective until 2012. “We have to show we have the technical capacity to handle this, and we are currently in an information-technology modernization phase,” he commented.
Jonathan Snowling, spokesman for the American Bankers Association in Washington, said he believes the measure raises “significant individual-privacy concerns without demonstrating that such intrusion is needed or particularly useful for the stated purpose.”
“There are questions about whether FinCEN has the technological capacity to handle all this data,” he added.