Section 314(a) Requests Mixed: System Not Completely 'Debugged'

The capability of searches by law enforcement agencies through the requests sent to financial institutions by FinCEN is not quite working out the way it was supposed to. When the moratorium was declared to be at an end, the announcement was that names would be forwarded to financial institution contacts every two weeks, and there would be two weeks to respond.

Almost at once, financial institutions reported receiving "requests" that were marked "Expedite - 48 hour response required" instead of the agreed upon two weeks. Concerned they may be holding up an important investigation, many financial institutions tried to comply with the shorter time requirement - until they started becoming more and more common. We were told there would be some expedited requests, but there is now a question on whether all of these searches are for terrorism investigations or for other research that is being done on different types of criminal or laundering investigations.

Protests on the demands should be forwarded to FinCEN, which has indicated it will review the system during the next few months. In the meantime, BANKERS' HOTLINE contacts in Washington say two weeks is what is require by the regulation, so that should be the time permitted to answer.

BANKERS' HOTLINE Advisor John Byrne, Counsel for the ABA, in testimony before the House Financial Services Subcommittee on March 11 on behalf of the financial industry, recommended a review of the 314 Demands for Record Searches. Some other recommendations made on our behalf were: Creating an office for USA PATRIOT Act oversight, Immediate development of a Staff Commentary for Patriot Act and BSA interpretation, and Uniform and consistent Patriot Act exam procedures.

We'll keep you posted on developments.

Copyright © 2003 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 12, No. 12, 3/03