WASHINGTON-The Treasury Department hastily called a meeting together last Tuesday and announced that it would place a moratorium on its final rule enforcing Section 314 of the USA PATRIOT Act, regarding the procedures for financial institutions to search for funds of blocked individuals and groups. CUNA was in attendance. This provision of the rule permits Financial Crimes Enforcement Network (FinCEN) to request a financial institution review of its records in search of accounts or transactions related to particular people or groups suspected of funding terrorism or money laundering. The moratorium, expected to continue for a few weeks, will allow Treasury a chance to clarify what exactly the department wants financials to do under the rule, such as computerized as opposed to manual searches. According to NAFCU officials, at the organization’s year-end member call-in, credit unions demonstrated concern on this very subject. One NAFCU member said that FinCEN had issued 21 requests for information that day and at least 20 the week before, which could amount to a huge burden. NAFCU Regulatory Compliance Counsel Eric Envall said that as long as the electronic request is sent in the correct format, such as a delimited file, the search would not be difficult. However, requests are currently being sent in a format that is incompatible with credit union databases and, therefore, must be completed manually. Envall added that, so long as the smaller credit unions are computerized, they should not experience any additional compliance burden. NAFCU has been in contact with the Treasury Department regarding these issues to ease the burden on credit unions. Potential privacy breaches are another concern for Treasury, CUNA explained following the meeting with Treasury. Department officials believe that some institutions are not sticking to the intended scope of the list of suspects, but are keeping the list to use for other purposes. If the suspected person is later exonerated, their access to financial services could be hindered in the future. CUNA plans to e-mail Treasury further comments. Another issue that Envall raised was that the regulation is unclear in what it defines as an “expeditious” search. NCUA was expected to disburse additional information about the moratorium just after deadline. [email protected]

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