[Congressional Record Volume 140, Number 32 (Monday, March 21, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: March 21, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
GENERAL LEAVE
Mr. NEAL of North Carolina. Mr. Speaker, I ask unanimous consent that
all Members may have 5 legislative days in which to revise and extend
their remarks on the bill presently under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from North Carolina?
There was no objection.
Mr. NEAL of North Carolina. Mr. Speaker, H.R. 3235 is an important
legislative step forward in fighting the crime of money laundering.
I am pleased to have cosponsored this legislation with the
distinguished chairman of the Banking Committee [Mr. Gonzalez], who has
played a leading role in addressing the threat that money laundering
poses to financial institutions.
One of the unique aspects of this legislation is that it combats
money laundering by seeking to eliminate 30 percent of the 10 million
currency transaction reports now being filed annually. Elimination of
these reports, which law enforcement officials inform us have no value,
will also reduce the paperwork burden on financial institutions.
Eliminating these unnecessary reports will enhance law enforcement
efforts. Reports on legitimate transactions are the chaff in which the
kernels of illegitimate transactions hide. By eliminating those
reports, it should be easier for law officials to identify those
reports which have a high degree of usefulness in combating money
laundering.
The Banking Committee added an important amendment to the
legislation. The amendment, which is contained in section 11 of the
bill, clarifies that the offense of structuring transactions to evade
currency reporting requirements does not require the Government to
prove that a defendant knew that structuring is illegal. This
clarification was necessary because of a January Supreme Court
decision, Ratzlaf versus United States, in which the Court held, by a 5
to 4 margin, that such a showing is necessary. Justice Blackmun, in his
dissent, pointed out that ``ignorance of the law * * * is no defense to
criminal prosecution'' and that Congress intended ``that a willful
violation of the antistructuring provisions requires knowledge of the
bank's reporting requirements and an intent to evade them, [not]
knowledge of the illegality of structuring.'' Section 11 makes it
completely clear that structuring violations require only intent to
evade the reporting requirements. Under the amendment, the Government
will not have to prove that the defendant knew structuring was illegal.
The Government will need only prove that the defendant structured
transactions with the intent to evade the reporting requirements.
Several other provisions of the bill are also worth noting.
Sections 7 and 8 address the role of money transmitters and check
cashers in money laundering. As financial institutions have become more
efficient in filing currency transactions reports and detecting and
reporting money-laundering schemes, money launderers have increasingly
turned to nondepository institutions as a vehicle for money laundering.
Section 7 contains a sense of the Congress that the States should
work together to develop uniform laws regulating money transmitters and
check cashers, and should provide for adequate enforcement of those
laws. As a consumer protection matter, the States are also urged to
consider regulation of check cashing fees, to prevent abuse of low-
income consumers who have little or no other sources of having checks
cashed.
Section 8 provides that money transmitters must register with the
Treasury. This will assure that the Treasury is aware of who is engaged
in the business, so that it can better monitor their compliance with
currency transaction reporting requirements. The legislation requires
that the Secretary establish a minimum threshold below which
registration is not required, so as to eliminate unnecessary burdens on
small businesses. At the same time, large money transmitting businesses
are required to make the lists of their agents available to law
enforcement agencies upon request. This will enable law enforcement
officials to check on the status of particular money transmitting
agents if that becomes necessary.
Mr. Speaker, this is an important piece of legislation that is
supported by both the law enforcement and the financial institutions
communities. I commend the chairman of the Banking Committee, the
gentleman from Texas [Mr. Gonzalez], for introducing it and the
gentleman from Florida [Mr. McCollum] for working to perfect it. I urge
the House to pass it.
Mr. Speaker, I reserve the balance of my time.
Mr. LEACH. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of H.R. 3235.
The Money Laundering Suppression Act of 1994, crafted under the
leadership of Chairman Neal, Chairman Gonzalez, and the ranking member
of the Financial Institutions Subcommittee, Bill McCollum, strikes an
appropriate balance between reducing the regulatory burden on our
financial institutions and improving detection of money laundering.
The Treasury Department has estimated that $110 billion is laundered
through our financial system each year. Some think the number may be as
high as $300 billion. Whatever the figure, it is an extraordinary
problem, representing the lifeblood of the drug trade.
However, since enactment of the Bank Secrecy Act in 1970, which
requires that a currency transaction report [CTR] be filed for each
monetary transaction over $10,000, nearly 54 million reports have been
filed with the Federal Government. Well intended as the 1970 law may
be, such a large data base has not proven conducive to effectively
using many reports.
H.R. 3235 represents an attempt to weed out those CTR's that are not
of much value in law enforcement, with a goal of allowing more
attention to be directed to those with a higher degree of law
enforcement usefulness.
The legislation will also: centralize the reporting of suspicious
transactions; subject foreign bank drafts to reporting for the first
time; require the banking agencies to improve training for bank
examiners to detect money-laundering schemes; and finally, the bill
will require all money transmitting businesses to register with the
Treasury Department.
Again, I thank Chairmen Gonzalez and Neal, and urge support for the
bill.
{time} 1220
Mr. Speaker, I reserve the balance of my time.
Mr. NEAL of North Carolina. Mr. Speaker, I yield 5 minutes to the
gentleman from Nevada [Mr. Bilbray].
Mr. BILBRAY. Mr. Speaker, I rise to express my serious concerns over
two sections of H.R. 3235.
Let me first commend the chairman for his efforts to combat money
laundering. The legislation before us today will reduce the number of
currency transaction reports banks are required to file, while making
the process more effective at identifying suspicious customer
transactions. However, I have serious reservations regarding sections 9
and 10 of the legislation.
One effect of sections 9 and 10 will be to eliminate the Treasury
Secretary's discretion to provide exemptions from Federal currency
transaction reporting regulations, even in cases where existing State
law already meet Federal standards. Since the revision of Federal laws
in the 1980's, Nevada has had State laws matching or surprising the
Federal reporting requirements. The Treasury Department has agreed that
this is the case and, as a result, has provided Nevada with an
exception from Federal reporting regulations.
Eliminating the Treasury Secretary's discretion to grant an exemption
will require creation of a new currency transaction reporting system
that parallels the existing State reporting system in Nevada. This will
result in significant new costs to my State's most important industry.
It will not improve currency transaction reporting to the Federal
Government.
There is no need to force Nevada to change the way it meets the
requirements of title 31 of the Federal code. I am not aware of anyone
who claims that Nevada's currency transaction reports are less
stringent than those compiled under Federal regulations. In fact,
forcing Nevada to adopt a new reporting structure would run contrary to
one of the main goals under H.R. 3235.
I understand that one of the main purposes of the changes in H.R.
3235 is to reduce the drain on Federal resources related to reporting
areas of marginal significance when it comes to criminal money
laundering, and to focus those resources instead on improved
enforcement in those areas more likely to experience significant
currency transaction violations. Requiring a new Federal reporting
structure to replace the existing State structure in Nevada will result
in requiring additional Federal resources to be committed in an area
where no substantial problems now exist.
Just last week, the Senate passed a companion bill to H.R. 3235
without sections 9 and 10. When we go to conference, I urge you to
seriously consider leaving the Treasury Secretary's discretion to grant
exemptions from Federal reporting regulations in place, at least as it
applies to existing reporting systems. It is working well in Nevada.
Nevada has worked closely with the Treasury Department over the years
to ensure that Federal reporting requirements are met, and I am
confident they will continue to do so.
Mr. Speaker, I support the bill, but I urge my colleagues in
conference to go along with the Senate and take out sections 9 and 10.
Mr. NEAL of North Carolina. Mr. Speaker, I yield myself such time as
I may consume.
Mr. Speaker, I just want to respond to the comments by the gentleman
from Nevada [Mr. Bilbray] and thank him for his concern. He is a very
dedicated Member of Congress, always looking out for the interest of
his State, and I appreciate his thoughts on the subject.
Mr. Speaker, a the gentleman said, the other body has passed a
similar money laundering bill, but without section 10. I anticipate
that this matter will be resolved in conference in a manner which
retains the section's authority to grant exemptions as appropriate,
especially to States which have effective laws and enforcement to
combat money laundering. I am a firm believer in Federal-State
cooperation and want to assure the gentleman that I will work to
resolve the differences between the two bills in a manner that balances
the needs of Federal law enforcement with minimizing regulatory
burdens.
The gentleman from Nevada [Mr. Bilbray] is probably aware that the
Treasury Department has not requested this change. They think that they
have adequate enforcement capability with their discretionary
authority, so we will certainly keep that in mind as we go to the
conference.
Mr. BILBRAY. Mr. Speaker, I thank the gentleman from North Carolina
[Mr. Neal] for that statement.
Mr. LEACH. Mr. Speaker, I yield back the balance of my time.
Mr. NEAL of North Carolina. Mr. Speaker, I, too, yield back the
balance of my time.
The SPEAKER pro tempore (Mr. Montgomery). The question is on the
motion offered by the gentleman from Texas [Mr. Gonzalez] that the
House suspend the rules and pass the bill, H.R. 3235, as amended.
The question was taken; and (two-thirds having voted in favor
thereof) the rules were suspended, and the bill, as amended, was
passed.
A motion to reconsider was laid on the table.
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