ABA Rips Treasury Wire Transfer Ideas

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ABA rips Treasury wire transfer ideas

The Treasury Department's proposal for wire transfer recordkeeping, intended to produce a paper trail for money laundering investigations, was attacked by ABA as unworkable and too costly to banks.

An ABA comment letter filed in January had little positive to say about the October 1990 proposal, calling it "a potentially serious burden to domestic banks and their customers without offering enough of a corresponding benefit to law enforcement's efforts to deter and prosecute money laundering activity." Specific points. Among the major arguments ABA made in its 16-page letter: * As proposed, the recordkeeping system would permit money launderers to provide erroneous and unverifiable information. This would defeat the system's purpose. * Many aspects of the proposal are out of synch with laws-such as the Uniform Commercial Code-and practices pertaining to funds transfers. * Many more exemptions are appropriate than the only category Treasury proposed-transfers between domestic banks for their own accounts.

Due to the volume of funds involved, ABA suggested that money laundering was only likely to be done through commercial transactions. Thus, it proposed exempting retail wire transfers.

ABA also proposed that a "window" be set up on the commercial side to isolate those transactions most likely to involve money laundering. It suggested the threshold for recordkeeping should be transactions of $10,000 or more-the general threshold for currency transaction reporting. …