NAFCU Questions Wisdom of Proposed FinCEN Reporting Rules
In a comment letter to the Financial Crime Enforcement Network on its proposed rulemaking on cross-border electronic transmittals of funds, NAFCU asked the agency to consider the regulatory burden, the amount of information it already receives and the security issues involved with reporting sensitive data.
FinCEN's proposal includes two new requirements: Depository institutions would have to report all CBETFs and also file an annual report listing the taxpayer identification number for each accountholder who transmitted or received a CBETF that year.
Although the proposal is unlikely to create a significant regulatory burden for credit unions, NAFCU said, "it does add to the quite onerous regulatory burden associated with the other requirements of the Bank Secrecy ACT (BSA). Accordingly, NAFCU requests the Board simply consider all of those burdens together as it moves forward and makes a determination regarding the utility of requiring this new information."
Given the amount of information the agency already receives via Suspicious Activity Reports, Currency Transaction Reports and other similar tools, NAFCU said it is "understandably skeptical as to whether more than a fractional amount of the new data will actually be examined in any way, much less analyzed and put to constructive use." Regarding the second requirement of the proposal, NAFCU suggested "it may be more appropriate to request that information as necessary, as is the current practice, instead of a blanket reporting requirement of all transactions."
Finally, given the security issues involved in transmitting and storing so much sensitive data, NAFCU recommended the agency take steps not just to protect against third party actors, but to also "ensure that the system is not compromised from within as a result of carelessness."
However, the association acknowledged FinCEN has not experienced such problems and asserted its "utmost confidence in the agency's capabilities in this regard." NAFCU also said it is "not irreconcilably opposed" to the proposed rules.