CUNA Comment Letter
CUNA Supports Use of Name and Address in Funds Transmittals
April 21, 2003
Mr. David Vogt
Executive Associate Director
Office of Regulatory Programs
FinCEN
P.O. Box 39
Vienna, VA 22183-0039
Dear Mr. Vogt:
The Credit Union National Association (CUNA) appreciates the opportunity to comment on the end of an exception that means that credit unions would have to include the true name and address of their members on fund transmittal orders of $3,000 or more. CUNA, a national trade association, represents more than 90 percent of the nation’s 10,000 state and federal credit unions.
Summary of CUNA's Views
- CUNA supports Financial Crimes Enforcement Network’s (“FinCEN”) intention to let the exception expire and require financial institutions to submit the true name and address of the member making the funds transmittal on June 1, 2003. Credit unions will be able to fully comply with this requirement by the due date.
Discussion
In 1998, FinCEN granted a conditional exception (“the CIF Exception”) to the strict operation of the so-called (“Travel Rule”) in the Bank Secrecy Act. The Travel Rule requires financial institutions to include the true name and address of their member or customer for transmittal orders of $3,000 or more. The CIF Exception permits financial institutions to substitute coded information for the true name and address of a member or customer in a funds transmittal order. According to FinCEN, it would let this exception expire in light of congressional calls for financial transparency after the terrorist attacks and because of evidence of abuse of the exception.
The Travel Rule requires financial institutions to include the name and address of the transmitter in transmittal orders of $3,000 or more. This information must “travel” with the order throughout the funds transmittal sequence.
FinCEN instituted the conditional exception and extended it twice in light of concerns expressed by financial institutions that they may not be able to comply with the Travel Rule. Financial institutions told FinCEN that their ability to comply with the Travel Rule depended on their ability to use their automated customer information files (“CIFs”). Although an originating institution always knew the originating member’s true name and address, the CIFs were often programmed with coded or nominee names and addresses. According to FinCEN, the reprogramming tasks involved in changing the CIFs were represented to be a significant barrier to compliance with the Travel Rule. Thus, FinCEN instituted the conditional exception, which could be fulfilled if certain conditions were met.
Many large credit unions include the true name and address of their members for transmittal orders of $3,000 or more and do not take advantage of the CIF Exception, which permits financial institutions to substitute coded data for this information. As a result, credit unions should be able to fully comply on the effective date of June 1, 2003. It is reasonable to assume that expiration of this exception will make financial transactions more transparent and that this transparency will be helpful to law enforcement officials.
Conclusion
CUNA supports the proposal to allow expiration of this conditional exception. If you have any further questions, please contact CUNA's Senior Vice President and Associate General Counsel Mary Dunn or me at (202) 638-5777.
Sincerely,
Michelle Q. Profit
Assistant General Counsel
