January 18, 2007

ABA STATEMENT ON CROSS-BORDER WIRE TRANSFER DATA

COLLECTION FEASIBILITY STUDY

by Wayne Abernathy, executive director of financial institutions policy, ABA

“In light of FinCEN’s breathtaking finding that the new program could result in half a billion new financial reports a year, it is essential that we observe the congressional mandate that costs, benefits, and feasibility be thoroughly examined before we proceed toward implementation.  Our current anti-money laundering program already suffers from overload of unnecessary data—with over 14 million reports submitted in 2006.  We don’t want to cripple our efforts with yet another, unguided mammoth paper chase, the most massive to date. 

“ABA is carefully reviewing the findings and information in the FinCEN feasibility study submitted to Congress on Tuesday, particularly to see if the government could effectively and safely collect, store and protect data on the proposed half-billion cross-border wire transfers reports.  Especially important will be how sensitive privacy and information security problems would be solved.

“ABA raised several questions during the study process, including whether the proposed system would be a cost-effective solution to catch illicit financial activity.  It would not be unusual for the $36 million price tag to underestimate costs to the government of the new program, and we note that FinCEN reports that it does not know how great the cost of the program will be on the financial industry and our customers.  Whatever these costs, the realistic return on investment—in terms of real-life reduction in financial crime—would have to be very high to justify this major new speculative venture, an achievement that has not been demonstrated in the existing, currency transaction reporting program. 

“In addition, banks—and especially our customers—need to be confident that customer information is handled in a safe and secure manner.  The report’s admission that FinCEN does not have the infrastructure to handle the potential data dump, and could not for years, is not reassuring.

“We renew our appeal to develop more effective policies to combat financial crime by looking at focused programs that provide materially useful information rather than pushing significant resources into a new mass data-gathering exercise. Law enforcement is currently able to locate and request transaction data and other relevant information on a broad range of accounts of suspects through the USA Patriot Act’s 314(a) process and other appropriate, targeted methods.  These targeted approaches are working and producing tangible results today and should be looked to as models for going forward.”

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The American Bankers Association, on behalf of the more than two million men and women

who work in the nation's banks, brings together all categories of banking institutions to

best represent the interests of this rapidly changing industry.  Its membership-which

includes community, regional and money center banks and holding companies, as well as savings associations, trust companies and savings banks-makes ABA the largest banking

trade association in the country.