[Federal Register Volume 85, Number 247 (Wednesday, December 23, 2020)]
[Notices]
[Pages 84105-84113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-28364]
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DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
Agency Information Collection Activities; Proposed Renewal;
Comment Request; Renewal Without Change of Regulations Requiring
Records to be Made and Retained by Financial Institutions, Banks, and
Providers and Sellers of Prepaid Access
AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury.
ACTION: Notice and request for comments.
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SUMMARY: As part of its continuing effort to reduce paperwork and
respondent burden, FinCEN invites comments on the proposed renewal,
without change, of currently approved information collections found in
existing Bank Secrecy Act regulations. Specifically,
[[Page 84106]]
the regulations covered by this notice and request for comments require
certain financial institutions to make and retain records associated
with certain types of transactions, including funds transfers,
transmittals of funds, and prepaid access transactions, among other
types of transactions. Although no changes are proposed to the
information collections themselves, this request for comments covers a
future expansion of the scope of the annual hourly burden and cost
estimates associated with these regulations. This request for comments
is made pursuant to the Paperwork Reduction Act of 1995.
DATES: Written comments are welcome, and must be received on or before
February 22, 2021.
ADDRESSES: Comments may be submitted by any of the following methods:
Federal E-rulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments. Refer to Docket Number
FINCEN-2020-0016 and the specific Office of Management and Budget (OMB)
control numbers 1506-0058 and 1506-0059.
Mail: Policy Division, Financial Crimes Enforcement
Network, P.O. Box 39, Vienna, VA 22183. Refer to Docket Number FINCEN-
2020-0016 and OMB control number 1506-0058 and 1506-0059.
Please submit comments by one method only. Comments will also be
incorporated into FinCEN's review of existing regulations, as provided
by Treasury's 2011 Plan for Retrospective Analysis of Existing Rules.
All comments submitted in response to this notice will become a matter
of public record. Therefore, you should submit only information that
you wish to make publicly available.
FOR FURTHER INFORMATION CONTACT: The FinCEN Regulatory Support Section
at 1-800-767-2825, or electronically at [email protected].
SUPPLEMENTARY INFORMATION:
I. Statutory and Regulatory Provisions
The legislative framework generally referred to as the Bank Secrecy
Act (BSA) consists of the Currency and Financial Transactions Reporting
Act of 1970, as amended by the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (USA PATRIOT Act) (Public Law 107-56) and other
legislation. The BSA is codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-
1959, 31 U.S.C. 5311-5314 and 5316-5332, and notes thereto, with
implementing regulations at 31 CFR Chapter X.
The BSA authorizes the Secretary of the Treasury, inter alia, to
require financial institutions to keep records and file reports that
are determined to have a high degree of usefulness in criminal, tax,
and regulatory matters, or in the conduct of intelligence or counter-
intelligence activities to protect against international terrorism, and
to implement anti-money laundering (AML) programs and compliance
procedures.\1\ Regulations implementing the BSA appear at 31 CFR
Chapter X. The authority of the Secretary of the Treasury (the
``Secretary'') to administer the BSA has been delegated to the Director
of FinCEN.\2\
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\1\ 31 U.S.C. 5311. Section 358 of the USA PATRIOT Act added
language expanding the scope of the BSA to intelligence or counter-
intelligence activities to protect against international terrorism.
\2\ Treasury Order 180-01 (re-affirmed Jan. 14, 2020).
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The Annunzio-Wylie Anti-Money Laundering Act of 1992 (Public Law
102-550) (Annunzio-Wylie) amended the BSA framework. Annunzio-Wylie
authorizes the Secretary and the Board of Governors of the Federal
Reserve System (the ``Board'') to jointly issue regulations requiring
insured depository institutions to maintain records of domestic funds
transfers.\3\ The Secretary, but not the Board, is authorized to
promulgate recordkeeping requirements for domestic wire transfers by
nonbank financial institutions.\4\ In addition, Annunzio-Wylie
authorizes the Secretary and the Board, after consultation with state
banking supervisors, to jointly issue regulations requiring insured
depository institutions and certain nonbank financial institutions to
maintain records of international funds transfers and transmittals of
funds.\5\
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\3\ 12 U.S.C. 1829b(b)(2).
\4\ 12 U.S.C. 1953.
\5\ 12 U.S.C. 1829b(b)(3). The terms ``funds transfer,''
``originator,'' ``beneficiary,'' and ``payment order'' apply only in
the context of banks. The term ``transmittal of funds'' includes a
funds transfer and is its counterpart in the context of nonbank
financial institutions. See 31 CFR 1010.100(ddd). Transmittors,
recipients, and transmittal orders in the context of nonbank
financial institutions play the same role as originators,
beneficiaries, and payment orders in the context of banks.
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A. Information Required To Be Collected, Retained, and Transmitted
under the Recordkeeping and Travel Rules (31 CFR 1020.410(a) and 31 CFR
1010.410(e) and (f)).
On January 3, 1995, Treasury and the Board jointly issued a
recordkeeping rule (the ``Recordkeeping Rule'') that requires banks and
nonbank financial institutions to collect and retain information
related to funds transfers and transmittals of funds in amounts of
$3,000 or more.\6\ The Recordkeeping Rule is intended to help law
enforcement and regulatory authorities to detect, investigate, and
prosecute money laundering, and other financial crimes by preserving an
information trail about persons sending and receiving funds through the
funds transfer system.
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\6\ 60 FR 220 (Jan. 3, 1995).
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At the same time, FinCEN issued a separate rule--the ``Travel
Rule''--that requires banks and nonbank financial institutions to
transmit information on certain funds transfers and transmittals of
funds to other banks or nonbank financial institutions participating in
the transfer or transmittal.\7\ The Travel Rule and the Recordkeeping
Rule complement each other. Generally, as noted below, the
Recordkeeping Rule requires financial institutions to collect and
retain the information that, under the Travel Rule, must be included
with transmittal orders, although the Recordkeeping Rule also has other
applications apart from ensuring that information is available to
include with funds transfers. FinCEN issued the Travel Rule pursuant to
statutory authority that permits the Treasury to require domestic
financial institutions or nonfinancial trades or businesses to maintain
appropriate procedures to ensure compliance with the BSA or to guard
against money laundering, and to establish AML programs.\8\
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\7\ 60 FR 234 (Jan. 3, 1995).
\8\ Id.; see also 31 U.S.C. 5218(a)(2) and (h).
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The Recordkeeping Rule is codified at 31 CFR 1020.410(a) and
1010.410(e), and the Travel Rule is codified at 31 CFR 1010.410(f).\9\
This notice proposes to renew the regulations that implement the
Recordkeeping Rule and the Travel Rule, along with all of the other
regulatory requirements under 31 CFR 1010.410, 1020.410, and
1022.420.\10,11\
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\9\ Recordkeeping requirements for banks are set forth in 31 CFR
1020.410(a). Recordkeeping requirements for nonbank financial
institutions are set forth in 31 CFR 1010.410(e). The Travel Rule--
codified at 31 CFR 1010.410(f)--applies by its terms to both bank
and nonbank financial institutions.
\10\ OMB control number 1506-0058 applies to 31 CFR 1010.410 and
31 CFR 1022.420. OMB control number 1506-0059 applies to 31 CFR
1020.410.
\11\ On October 27, 2020, the Board and FinCEN (collectively,
the ``Agencies'') issued a joint notice of proposed rulemaking to
modify the thresholds in the Recordkeeping Rule and the Travel Rule
The proposed modification would reduce these thresholds from $3,000
to $250 for funds transfers and transmittals of funds that begin or
end outside the United States. The proposed modification would also
clarify the meaning of ``money'' as used in the Recordkeeping Rule
and Travel Rule to ensure that the rules apply to domestic and
cross-border transactions involving convertible virtual currency
(CVC), which is a medium of exchange (such as cryptocurrency) that
either has an equivalent value as currency, or acts as a substitute
for currency, but lacks legal tender status. The Agencies further
proposed to clarify that these rules apply to domestic and cross-
border transactions involving digital assets that have legal tender
status. See 85 FR 68005 (October 27, 2020).
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[[Page 84107]]
The Recordkeeping Rule and Travel Rule collectively require banks
and nonbank financial institutions to collect, retain, and transmit
information on funds transfers and transmittals of funds in amounts of
$3,000 or more.
Under the Recordkeeping Rule, the originator's bank or
transmittor's financial institution must collect and retain the
following information: (a) Name and address of the originator or
transmittor; (b) the amount of the payment or transmittal order; (c)
the execution date of the payment or transmittal order; (d) any payment
instructions received from the originator or transmittor with the
payment or transmittal order; and (e) the identity of the beneficiary's
bank or recipient's financial institution. In addition, the
originator's bank or transmittor's financial institution must retain
the following information if it receives that information from the
originator or transmittor: (a) Name and address of the beneficiary or
recipient; (b) account number of the beneficiary or recipient; and (c)
any other specific identifier of the beneficiary or recipient. The
originator's bank or transmittor's financial institution is required to
verify the identity of the person placing a payment or transmittal
order if the order is made in person and the person placing the order
is not an established customer.\12\ Similarly, should the beneficiary's
bank or recipient's financial institution deliver the proceeds to the
beneficiary or recipient in person, the bank or nonbank financial
institution must verify the identity of the beneficiary or recipient--
and collect and retain various items of information identifying the
beneficiary or recipient--if the beneficiary or recipient is not an
established customer. Finally, an intermediary bank or financial
institution--and the beneficiary's bank or recipient's financial
institution--must retain originals or copies of payment or transmittal
orders.
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\12\ The term ``established customer'' is defined at 31 CFR
1010.100(p).
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Under the Travel Rule, the originator's bank or transmittor's
financial institution is required to include information, including all
information required under the Recordkeeping Rule, in a payment or
transmittal order sent by the bank or nonbank financial institution to
another bank or nonbank financial institution in the payment chain. An
intermediary bank or financial institution is also required to transmit
this information to other banks or nonbank financial institutions in
the payment chain, to the extent the information is received by the
intermediary bank or financial institution.
B. Additional Records To Be Made and Retained by Financial Institutions
(31 CFR 1010.410(a) Through (c))
31 CFR 1010.410(a) through (c) \13\ require financial institutions
\14\ to retain either the original or a copy of the following:
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\13\ 31 CFR 1010.410(d) requires the retention of a record of
information for a period of time as the Secretary may require in an
order issued under 31 CFR 1010.370(a), not to exceed five years. The
recordkeeping burden for 31 CFR 1010.410(d) is accounted for under
OMB control number 1506-0056, which applies to 31 CFR 1010.370(a).
\14\ Except for 31 CFR 1010.410(e), which only applies to
financial institutions other than banks, each of the requirements of
31 CFR 1010.410 applies to ``financial institutions'' as defined in
31 CFR 1010.100(t). This provision defines a financial institution
to include each agent, agency, branch, or office within the United
States of any person doing business, whether or not on a regular
basis or as an organized business concern, in one or more of the
following capacities: (1) A bank (except bank credit card systems);
(2) a broker or dealer in securities; (3) a money services business
as defined in 31 CFR 1010.100(ff); (4) A telegraph company; (5) a
casino; (6) a card club; (7) a person subject to supervision by any
state or Federal bank supervisory authority; (8) a futures
commission merchant; (9) an introducing broker in commodities; or
(10) a mutual fund.
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A record of each extension of credit in excess of $10,000,
except if the extension of credit is secured by an interest in real
property. The record must include the name and address of the person to
whom the extension of credit is made, and the amount, purpose, and date
of the extension of credit.\15\
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\15\ 31 CFR 1010.410(a).
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A record of each request received or given regarding any
transaction resulting in, or intended to result in but later canceled
if such a record is normally made, the transfer of currency or other
monetary instruments, funds, checks, investment securities, or credit
of more than $10,000 to or from any person, account, or place outside
the United States.\16\
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\16\ 31 CFR 1010.410(b).
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A record of each request given to another financial
institution or other person located in or outside of the United States,
regarding a transaction intended to result in a transfer of funds, or
of currency, other monetary instruments, checks, investment securities,
or credit, of more than $10,000 to a person, account, or place outside
the United States.\17\
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\17\ 31 CFR 1010.410(c).
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C. Additional Records To Be Made and Retained by Banks (31 CFR 1020.410
(c))
31 CFR 1020.410(c), requires banks to retain either the original or
a copy of the following: \18\
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\18\ Note that 31 CFR 1020.410(b) is obsolete on its face
because the recordkeeping requirements apply to requirements that
apply within 30 days of the sale or redemption of certificates of
deposit after May 31, 1978 and before October 1, 2003, or the
opening of deposit or share account after June 30, 1972 and before
October 1, 2003.
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Each document granting signature authority over each
deposit or share account, including any notations, if such are normally
made, of specific identifying information to verify the identity of the
signer.\19\
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\19\ 31 CFR 1020.410(c)(1).
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A record on each deposit or share account, showing each
transaction in, or with respect to, that account.\20\
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\20\ 31 CFR 1020.410(c)(2).
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Each check, clean draft, or money order drawn on the bank
or issued and payable by it, with certain exceptions.\21\
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\21\ 31 CFR1020.410(c)(3). See a list of exceptions to the
recordkeeping requirement at 31 CFR 1020.410(c)(3).
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A record of each item in excess of $100 comprising a debit
to a customer's deposit or share account, with certain exceptions.\22\
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\22\ 31 CFR 1020.410(c)(4).
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A record of each item, including checks, drafts, or
transfers of credit of more than $10,000 remitted or transferred to a
person, account, or place outside the United States.\23\
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\23\ 31 CFR 1020.410(c)(5).
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A record of each remittance or transfer of funds, or of
currency, other monetary instruments, checks, investment securities, or
credit, of more than $10,000 to a person, account or place outside the
United States.\24\
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\24\ 31 CFR 1020.410(c)(6).
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Each check or draft in excess of $10,000 drawn on or
issued by a foreign bank which the domestic bank has paid or presented
to a nonbank drawee for payment.\25\
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\25\ 31 CFR 1020.410(c)(7).
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Each item, including checks, drafts or transfers of credit
of more than $10,000 received directly and not through a domestic
financial institution, by letter, cable or any other means, from a
bank, broker or dealer in foreign exchange outside the United
States.\26\
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\26\ 31 CFR 1020.410(c)(8).
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A record of each receipt of currency, other monetary
instruments, investment securities or checks, and of each transfer of
funds or credit, of more than $10,000 received on any one occasion
directly and not through a domestic financial institution, from a
[[Page 84108]]
bank, broker or dealer in foreign exchange outside the United
States.\27\
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\27\ 31 CFR 1020.410(c)(9).
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Records prepared or received by a bank in the ordinary
course of business, which would be needed to reconstruct a transaction
account and to trace a check in excess of $100 deposited in such
account through its domestic processing system or to supply a
description of a deposited check in excess of $100. This requirement is
only applicable to demand deposits.\28\
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\28\ 31 CFR 1020.410(c)(10).
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A record containing the name, address, and taxpayer
identification number (TIN), if available, of the purchaser of each
certificate of deposit, as well as a description of the instrument,
notation of the method of payment, and the date of the
transactions.\29\
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\29\ 31 CFR 1020.410(c)(11).
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A record containing the name, address, and TIN, if
available, of any person presenting a certificate of deposit for
payment, as well as a description of the instrument and the date of the
transaction.\30\
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\30\ 31 CFR 1020.410(c)(12).
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Each deposit slip or credit ticket reflecting a
transaction in excess of $100 or the equivalent record for direct
deposit or other wire transfer deposit transactions. The record must
include the amount of any currency involved.\31\
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\31\ 31 CFR 1020.410(c)(13).
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D. Additional Records To Be Maintained by Providers and Sellers of
Prepaid Access (31 CFR 1022.420)
Providers and sellers of prepaid access are a type of money
services business (MSB), as defined in Sec. 1010.100(ff)(4). BSA
regulations specific to MSBs are found at 31 CFR Chapter X. Providers
and sellers of prepaid access must maintain access to transactional
records generated in the ordinary course of business that would be
needed to reconstruct prepaid access activation, loads, reloads,
purchases, withdrawals, transfers, or other prepaid-related
transactions.
II. Paperwork Reduction Act of 1995 (PRA) \32\
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\32\ Public Law 104-13, 44 U.S.C. 3506(c)(2)(A).
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Title: Records to be made and retained by financial institutions
(31 CFR 1010.410), records to be made and retained by banks (31 CFR
1020.410), and additional records to be maintained by providers and
sellers of prepaid access (31 CFR 1022.420).\33\
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\33\ All of the records required to be made and retained under
31 CFR 1010.410, 1020.410, and 1022.420 are required to be retained
for five years pursuant to 31 CFR 1010.430(d).
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OMB Control Number: 1506-0058 and 1506-0059.\34\
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\34\ OMB control number 1506-0058 applies to 31 CFR 1010.410 and
31 CFR 1022.420. OMB control number 1506-0059 applies to 31 CFR
1020.410.
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Report Number: Not applicable.
Abstract: FinCEN is issuing this notice to renew the OMB control
numbers for regulations requiring certain financial institutions to
make and retain records associated with certain types of transactions,
including funds transfers, transmittals of funds, and prepaid access
transactions, among other types of transactions.
Affected Public: Businesses or other for-profit institutions, and
non-profit institutions.
Type of Review:
Renewal without change of a currently approved information
collections.
Propose for review and comment a renewal of the portion of
the PRA burden that has been subject to notice and comment in the past
(the ``traditional annual PRA burden'').
Propose for review and comment a future expansion and
clarification of the scope of the PRA burden (the ``future annual PRA
burden'').
Frequency: As required.
Estimated Number of Respondents: 28,567 financial institutions.\35\
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\35\ Table 1 below sets forth a breakdown of the types of
financial institutions covered by this notice.
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Estimated Recordkeeping Burden: In Part 1 of this notice, FinCEN
describes the breakdown of the estimated number of financial
institutions, by type, impacted by each regulatory requirement. In Part
2, FinCEN proposes for review and comment a renewal of the estimate of
the traditional annual PRA hourly burden, which includes an annual
hourly burden estimate per financial institution similar to that used
in the past, with the incorporation of a more robust cost estimate. The
scope and methodology used in the past assigned a total annual hourly
burden estimate, per financial institution, to multiple recordkeeping
requirements within the regulations, and did not assign an annual
hourly burden estimate, per financial institution, to each
recordkeeping requirement. The prior renewals also did not include an
estimate of the number of transactions, by type, for which records are
required to be made and retained. FinCEN assesses that the volume of a
given type of transaction by financial institution, for which a record
is required to be made and retained, would be the best indication of
the annual hourly burden estimate per financial institution. In Part 3,
FinCEN proposes for review and comment a methodology to estimate the
hourly burden and the cost of a future estimate of an annual PRA burden
that includes the burden and cost broken down by each type of
recordkeeping requirement covered by the regulations being renewed. The
methodology also includes identifying estimates for the number of
transactions conducted annually per financial institution, which would
trigger each recordkeeping requirement. Finally, in Part 4, FinCEN
solicits input from the public about: (a) The accuracy of the estimate
of the traditional annual PRA burden; (b) a more granular proposed
method to estimate a future annual PRA burden by calculating the burden
per recordkeeping requirement; (c) the criteria, metrics, and most
appropriate questions FinCEN should consider when researching the
information to estimate the future annual PRA burden, according to the
methodology proposed; and (d) any other comments about the regulations
and the current and proposed future hourly burden and cost estimates of
these requirements.
Part 1. Breakdown of the Financial Institutions Covered by This Notice
The breakdown of financial institutions, by type, covered by this
notice is reflected in Table 1 below:
[[Page 84109]]
Table 1--Breakdown, by Type, of Financial Institutions Covered by This
Notice
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Number of
Type of financial institution financial
institutions
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Banks................................................... \36\ 10,542
Brokers or dealers in securities........................ \37\ 3,640
Futures commission merchants............................ \38\ 61
Money services businesses (MSBs) that conduct money \39\ 12,692
transmission...........................................
MSBs that are providers and sellers of prepaid access... \40\ 1,632
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Total number of financial institutions.............. 28,567
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31 CFR 1010.410(a) Through (c)
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\36\ According to the Federal Deposit Insurance Corporation
(FDIC) there were 5,103 FDIC-insured banks as of March 31, 2020.
According to the Federal Reserve Board (FRB), there were 203 other
entities supervised by the FRB, as of June 16, 2020, that fall
within the definition of bank (20 Edge Act institutions, 15
agreement corporations (as defined in 12 CFR 28.2), and 168 foreign
banking organizations). According to the National Credit Union
Administration there were 5,236 federally regulated credit unions as
of December 31, 2019.
\37\ According to the Securities and Exchange Commission (SEC),
there were 3,640 brokers or dealers in securities registered with
the SEC, as of March 31, 2020.
\38\ According to the Commodities and Futures Trading Commission
(CFTC), there were 61 futures commission merchants registered with
the CFTC, as of March 31, 2020.
\39\ As of June 2020, there were 12,692 MSBs registered with
FinCEN that indicated they were conducting money transmission.
\40\ FinCEN's MSB registration database. See https://www.fincen.gov/msb-state-selector.
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Description of Recordkeepers: Financial institutions providing
extensions of credit in excess of $10,000 (other than those secured by
real property), and engaging in transfers of funds, currency, other
monetary instruments, checks, investment securities, or credit of more
than $10,000 to or from the United States. Although the regulations on
their face would apply to all financial institutions, only banks,
credit unions, brokers or dealers in securities, futures commission
merchants (FCMs), and money transmitters would be likely to issue
extensions of credit in excess of $10,000, or transfer funds, currency,
monetary instruments, checks, investment securities, or credit of more
than $10,000 to or from the United States.
31 CFR 1010.410(d)
As noted above, the recordkeeping burden for 31 CFR 1010.410(d) is
accounted for under OMB control number 1506-0056, which applies to 31
CFR 1010.370(a). A notice to renew OMB control number 1506-0056 will
also be published in the Federal Register in December 2020.
31 CFR 1010.410(e)
Description of Recordkeepers: Financial institutions other than
banks that conduct transmittals of funds, including funds transfers, in
the amount of $3,000 or more. Although the regulation on its face would
apply to all nonbank financial institutions, mostly money transmitters
that conduct transmittals of funds would be impacted.
31 CFR 1010.410(f)
Description of Recordkeepers: Financial institutions that are the
transmitting or intermediary financial institution in a funds transfer
or transmittal of funds. Although the regulation on its face would
apply to all financial institutions, only banks, including credit
unions, and money transmitters that conduct funds transfers or
transmittals of funds would be impacted.
31 CFR 1020.410
Description of Recordkeepers: Banks, including credit unions, that
conduct funds transfers by acting as the transmitting, intermediary, or
recipient bank outlined in 31 CFR 1020.410(a), and banks that conduct
transactions outlined in 31 CFR 1020.410(c).
31 CFR 1022.420
Description of Recordkeepers: MSBs that are provider and sellers of
prepaid access, as defined in 31 CFR 1010.100(ff)(4) and (7), that
conduct prepaid access-related transactions.
Part 2. Traditional Annual PRA Burden and Cost
OMB Control Number 1506-0058
31 CFR 1010.410(a) Through (c)
Each financial institution must retain an original or a copy of
records related to extensions of credit in excess of $10,000 (other
than those secured by real property), and an original or copy of
records related to transfers of funds, currency, other monetary
instruments, checks, investment securities, or credit of more than
$10,000 to or from the United States.\41\ Due to the challenges of
obtaining the total number of such records required to be maintained
per financial institution, in its most recent control number renewal,
FinCEN estimated that the annual recordkeeping burden per financial
institution for these requirements was 50 hours.\42\ FinCEN continues
to estimate that the annual hourly burden of complying with 31 CFR
1010.410(a) through (c) is 50 hours per financial institution.
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\41\ 31 CFR 1010.410(a) through (c).
\42\ 82 FR 31686, 31688 (July 7, 2017).
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26,935 financial institutions \43\ multiplied by 50 hours, results
in a total annual hourly burden estimate of 1,346,750 hours.
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\43\ See Table 1, supra. 26,935 represents the number of
financial institutions listed in the title of this notice, other
than MSBs that are providers and sellers of prepaid access, because
such MSBs would not conduct transactions described in 31 CFR
1010.410(a) through (c).
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31 CFR 1010.410(e)
Each nonbank financial institution must collect and retain
information related to transmittals of funds in amounts of $3,000 or
more. Due to the challenges of obtaining the total number of
transmittals of funds of $3,000 or more conducted per nonbank financial
institution, FinCEN estimated, in its most recent control number
renewal, that the annual recordkeeping burden per financial institution
was 16 hours.\44\ FinCEN continues to estimate that the annual hourly
burden to comply with 31 CFR 1010.410(e) is 16 hours per financial
institution.
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\44\ 82 FR 31686, 31688 (July 7, 2017). Note that, due to an
administrative error, the 2017 control number renewal inadvertently
describes this 16 hour burden as applicable to the requirements of
both 31 CFR 1010.410(e) and 31 CFR 1010.410(f).
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12,692 MSBs \45\ providing money transmission services multiplied
by 16 hours, results in a total annual hourly burden estimate of
203,072 hours.
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\45\ See Table 1 supra for the estimated number of MSBs that
provide money transmission services.
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31 CFR 1010.410(f)
Each financial institution must transmit information on funds
transfers and transmittals of funds when acting as the transmitting or
intermediary financial institution. Due to the challenges of obtaining
the total number of funds transfers or transmittals of funds for which
a financial institution was acting as the transmitting or intermediary
financial institution, FinCEN estimated, in its most recent control
number renewal, that the annual recordkeeping burden per financial
institution was 12 hours.\46\ FinCEN continues to estimate that the
annual hourly burden to comply with 31 CFR 1010.410(f) is 12 hours per
financial institution.
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\46\ 82 FR 31686, 31688 (July 7, 2017). Note that, due to an
administrative error, the 2017 control number renewal inadvertently
describes this 12 hour burden as applicable to the requirements of
31 CFR 1010.410(g) rather than 31 CFR 1010.410(f).
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[[Page 84110]]
23,234 banks and MSBs conducting money transmission,\47\ multiplied
by 12 hours, results in a total annual hourly burden estimate of
278,808 hours.
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\47\ See Table 1 supra. 23,234 equates to 10,542 banks and
12,692 MSBs that provide money transmission services.
---------------------------------------------------------------------------
31 CFR 1022.420
Each provider or seller of prepaid access is required to maintain
access to transactional records generated in the ordinary course of
business that would be needed to reconstruct prepaid access activation,
loads, reloads, purchases, withdrawals, transfers, or other prepaid-
related transactions. Due to the challenges of obtaining the total
number of prepaid access transactions, FinCEN estimated, in its most
recent control number renewal, that the annual recordkeeping burden per
financial institution was 16 hours. FinCEN continues to estimate that
the annual hourly burden to comply with 31 CFR 1022.420 is 16 hours per
financial institution.
1,632 MSBs which are providers or sellers of prepaid access,\48\
multiplied by 16 hours, results in a total annually hourly burden
estimate of 26,112 hours.
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\48\ See Table 1 supra for the total number of MSBs that are
providers or sellers of prepaid access.
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Total Annual Traditional PRA Hourly Burden for OMB Control Number
1506-0058: 1,854,742 hours (1,346,750 + 203,072 + 278,808 +
26,112).\49\
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\49\ 1,346,750 hours (31 CFR 1010.410(a)-(c)) + 203,072 hours
(31 CFR 1010.410(e)) + 278,808 hours (31 CFR 1010.410(f)) + 26,112
hours (31 CFR 1022.420) = 1,854,742 hours.
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OMB Control Number 1506-0059
31 CFR 1020.410
Banks, including credit unions, are required to (i) collect and
retain information on funds transfers when acting as the transmitting,
intermediary, or recipient bank, and (ii) retain an original or copy of
records, when conducting transactions outlined in 31 CFR 1020.410(c).
Due to the challenges of obtaining the total number of funds transfers
of $3,000 or more conducted by each bank acting as the transmitting,
intermediary, or recipient bank, and the challenges of obtaining the
total number of transactions that would trigger each of the
recordkeeping requirements per bank, as required by 31 CFR 1020.410(c),
FinCEN estimated, in its most recent control number renewal, that the
annual recordkeeping burden per bank was 100 hours. FinCEN continues to
estimate that the annual hourly burden to comply with all of the
recordkeeping requirements in 31 CFR 1020.410 is 100 hours per bank.
10,542 banks \50\ multiplied by 100 hours results in a total annual
hourly burden estimate of 1,054,200 hours.
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\50\ See Table 1 supra for the total number of banks.
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Total Annual Traditional PRA Hourly Burden for OMB Control Number
1506-0059: 1,054,200 hours.
Total Annual Traditional PRA Hourly Burden for OMB Control Numbers
1506-0058 and 1506-0059.
FinCEN's estimate of the total traditional annual PRA burden for
each of the recordkeeping requirements being renewed in this notice is
2,908,942 hours, as detailed in Table 2 below:
Table 2--Breakdown of Financial Institutions Impacted by Each Regulatory Requirement, and the Estimated Total
Annual Burden Hours per Requirement
----------------------------------------------------------------------------------------------------------------
Traditional
annual burden Total annual
Type of financial Number of estimate per burden hours
Regulatory requirement institution impacted by financial financial per regulatory
the requirement institutions institution requirement
(hours)
----------------------------------------------------------------------------------------------------------------
31 CFR 1010.410(a)-(c)................ Banks, brokers or 26,935 50 1,346,750
dealers in securities,
FCMs, and MSBs that
conduct money
transmission.
31 CFR 1010.410(e).................... MSBs that conduct money 12,692 16 203,072
transmission.
31 CFR 1010.410(f).................... Banks and MSBs the 23,234 12 278,808
conduct money
transmission.
31 CFR 1022.420....................... MSBs that are providers 1,632 16 26,112
or sellers of prepaid
access.
31 CFR 1020.410....................... Banks................... 10,542 100 1,054,200
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Total annual hour burden hours.... ........................ .............. .............. 2,908,942
----------------------------------------------------------------------------------------------------------------
To calculate the hourly costs of the burden estimate, FinCEN
identified three roles and corresponding staff positions involved in
maintaining records as required by 31 CFR 1010.410, 1020.410, and
1022.420: (i) General supervision (providing process oversight); (ii)
direct supervision (reviewing operational-level work and cross-checking
all or a sample of the work product against supporting documentation);
and (iii) clerical work (engaging in recordkeeping).
FinCEN calculated the fully-loaded hourly wage for each of these
three roles by using the median wage estimated by the U.S. Bureau of
Labor Statistics (BLS),\51\ and computing an additional benefits cost
as follows:
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\51\ The U.S. Bureau of Labor Statistics, Occupational
Employment Statistics-National, May 2019, available at https://www.bls.gov/oes/tables.htm. The most recent data from the BLS
corresponds to May 2019. For the benefits component of total
compensation, see U.S. Bureau of Labor Statistics, Employer's Cost
per Employee Compensation as of December 2019, available at https://www.bls.gov/news.release/ecec.nr0.htm. The ratio between benefits
and wages for financial activities is $15.95 (hourly benefits)/
$32.05 (hourly wages) = 0.50. The benefit factor is 1 plus the
benefit/wages ratio, or 1.50. Multiplying each hourly wage by the
benefit factor produces the fully-loaded hourly wage per position.
Table 3--Fully-Loaded Hourly Wage by Role and BLS Job Position for All Financial Institutions Covered by This
Notice
----------------------------------------------------------------------------------------------------------------
Median hourly Fully-loaded
Role BLS-code BLS-name wage Benefit factor hourly wage
----------------------------------------------------------------------------------------------------------------
General supervision........... 11-3031 Financial $62.45 1.50 $93.68
Manager.
Direct supervision............ 13-1041 Compliance 33.20 1.50 49.80
Officer.
Clerical work (research, 43-3099 Financial Clerk. 20.40 1.50 30.60
review, and recordkeeping).
----------------------------------------------------------------------------------------------------------------
[[Page 84111]]
FinCEN estimates that, in general and on average,\52\ each role
would spend different amounts of time on each portion of the
traditional annual PRA burden, as follows:
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\52\ By ``in general,'' FinCEN means without regard to outliers
(e.g., financial institutions that conduct transactions that trigger
the recordkeeping requirements described in this notice with
complexities or volumes that are uncommonly higher or lower than
those of the population at large). By ``on average,'' FinCEN means
the mean of the distribution of each subset of the population.
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The cost of each hour of burden, broken down by role, to produce
and maintain records as outlined in 31 CFR 1010.410, 1020.410, and
1022.420 would be $37.00 as set out in Table 4 below:
Table 4--Weighted Average Hourly Cost of Making and Maintaining the Records
----------------------------------------------------------------------------------------------------------------
General supervision Direct supervision Clerical work Weighted
------------------------------------------------------------------------------------------------- average hourly
% Time Hourly cost % Time Hourly cost % Time Hourly cost cost
----------------------------------------------------------------------------------------------------------------
5 $4.68 15 $7.47 80 $24.48 $37.00
----------------------------------------------------------------------------------------------------------------
$36.63 rounded to $37.00.
The total estimated cost of the traditional annual PRA burden for
the regulatory requirements being renewed in this notice is
$107,630,854, as reflected in Table 5 below:
Table 5--Total Cost of Traditional Annual PRA Burden
----------------------------------------------------------------------------------------------------------------
OMB control No. Hourly burden Hourly cost Total Cost
----------------------------------------------------------------------------------------------------------------
1506-0058....................................................... 1,854,742 $37 $68,625,454
1506-0059....................................................... 1,054,200 37 39,005,400
-----------------------------------------------
Total cost.................................................. .............. .............. 107,630,854
----------------------------------------------------------------------------------------------------------------
Part 3--Future Annual PRA Burden
In the future, FinCEN will include the burden and cost for each
type of recordkeeping requirement covered by the regulations being
renewed. The future burden estimate will also include estimates of the
number of transactions conducted annually per financial institution,
which trigger each recordkeeping requirement.
31 CFR 1010.410(a) Through (c)
As noted above, each financial institution must retain an original
or a copy of records related to extensions of credit in excess of
$10,000 (other than those secured by real property), and an original or
copy of records related to transfers of funds, currency, other monetary
instruments, checks, investment securities, or credit of more than
$10,000 to or from the United States. In order to more accurately
estimate the related PRA burden in the future, FinCEN intends to obtain
a better understanding of how many types of financial institutions
conduct these transactions, and the average volume of such transactions
per financial institution.
31 CFR 1010.410(e)
As described in greater detail in Section I above, each nonbank
financial institution must collect and retain information related to
transmittals of funds in amounts of $3,000 or more. In order to more
accurately estimate the related PRA burden in the future, FinCEN
intends to obtain a better understanding of the volume of transmittals
of funds conducted by MSBs, and determine the average volume of
transmittals of funds per the transmitting, intermediary, or recipient
MSB.
31 CFR 1010.410(f)
As described in greater detail in Section I above, each financial
institution must transmit information on funds transfers and
transmittals of funds when acting as the transmitting or the
intermediary financial. In order to more accurately estimate the
related PRA burden in the future, FinCEN intends to obtain a better
understanding of the volume of funds transfers and transmittals of
funds conducted by banks and MSBs, and determine the average volume of
funds transfer per bank and transmittals of funds per transmitting or
intermediary bank or MSB.
31 CFR 1022.420
Each provider or seller of prepaid access is required to maintain
access to transactional records generated in the ordinary course of
business that would be needed to reconstruct prepaid access activation,
loads, reloads, purchases, withdrawals, transfers, or other prepaid-
related transactions. In order to more accurately estimate the related
PRA burden in the future, FinCEN intends to obtain a better
understanding of the volume of prepaid access transactions conducted by
MSBs, and determine the average volume of prepaid transactions per MSB.
31 CFR 1020.410(a)
As described in greater detail in Section I above, banks, including
credit unions, are required to collect and retain information on funds
transfers in amounts of $3,000 or more, conducted by the bank acting as
the transmitting, intermediary, or recipient bank. In order to more
accurately estimate the PRA burden in the future, FinCEN intends to
obtain a better understanding of the volume of funds transfers
conducted by banks, and determine the average volume of funds transfer
per transmitting, intermediary, or recipient bank.
31 CFR 1020.410(c)
As described in greater detail in Section I, banks, including
credit unions, are required to retain an original or copy of the
records outlined in 31 CFR 1020.410(c). In order to more accurately
estimate the PRA burden in the future, FinCEN intends to obtain a
better understanding of how many banks conducted each of the 13 types
of transactions described in 31 CFR
[[Page 84112]]
1020.410(c), and determine the average volume of these transactions per
bank.
FinCEN does not have the information needed to estimate the number
of annual transactions that trigger each recordkeeping requirement
being renewed in this notice. For that reason, FinCEN is relying on
estimates used in prior renewals of these OMB control numbers and the
applicable regulations. FinCEN further recognizes that after receiving
public comments as a result of this notice, future annual PRA hourly
burden and cost estimates may vary significantly. In order to arrive at
more precise estimates of net BSA hourly burden and cost, FinCEN
intends to conduct more granular studies in the near future, regarding
the types and volume of transactions conducted annually, which trigger
each recordkeeping requirement, and the time it takes to collect and
record the information required for each recordkeeping requirement.\53\
The data obtained in these studies also may result in a significant
variation of the estimated annual PRA burden.
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\53\ Net hourly burden and cost are the burden and cost a
financial institution incurs to comply with requirements that are
unique to the BSA, and that do not support any other business
purpose or regulatory obligation of the financial institution.
Burden for purposes of the PRA does not include the time and
financial resources needed to comply with an information collection,
if the time and resources are for things a business (or other
person) does in the ordinary course of its activities if the agency
demonstrates that the reporting activities needed to comply are
usual and customary. 5 CFR 1320.3(b)(2). For example, depending on
the nature of the transaction, a financial institution may be
collecting and maintaining some of the same information on funds
transfers, transmittals of funds, prepaid access transactions, as
well as other transactions that are required to be recorded in 31
CFR 1010.410, 1020.410, and 1022.420 in order to satisfy other
obligations. Those obligations may include (i) protecting the
financial institution from fraud against itself or its customers,
(ii) complying with other non-BSA regulatory requirements such as
those imposed by the specific Federal functional regulator, or (iii)
maintaining proper accounting information.
---------------------------------------------------------------------------
Estimated Number of Respondents: 28,567, as set out in Table 1.
Estimated Total Annual Recordkeeping Burden: The estimated total
annual PRA burden is 2,908,942 hours, as set out in Table 2.
Estimated Total Annual Recordkeeping Cost: The estimated total
annual PRA cost is $107,630,854, as set out in Table 5.
An Agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless the collection of
information displays a valid OMB control number. Records required to be
retained under the BSA must be retained for five years.
Part 4--Request for Comments
(a) Specific Request for Comments on the Traditional Annual PRA Hourly
Burden and Cost
FinCEN invites comments on any aspect of the traditional annual PRA
burden, as set out in Part 2 of this notice. In particular, FinCEN
seeks comments on the adequacy of: (i) FinCEN's assumptions underlying
its estimate of the burden; (ii) the estimated number of hours required
by each portion of the burden; and (iii) the organizational levels of
the financial institution engaged in each portion of the burden, their
estimated hourly remuneration, and the estimated proportion of
participation by each role. FinCEN encourages commenters to include any
publicly available sources for alternative estimates or methodologies.
(b) Specific Request for Comments on the Proposed Criteria for
Determining the Scope of the Future Annual PRA Hourly Burden and Cost
Estimate
FinCEN invites comments on any aspect of the criteria for a future
estimate of the annual PRA burden, as set out in Part 3 of this notice.
(c) Specific Request for Comments on the Appropriate Criteria,
Methodology, and Questionnaire Required To Obtain Information to More
Precisely Estimate the Future Annual PRA Hourly Burden and Cost
FinCEN invites comments on the most appropriate and comprehensive
means to question financial institutions about the annual hourly burden
and cost attributable solely to the regulations covered by this notice
(i.e., the hourly burden and cost of complying with the recordkeeping
requirements imposed exclusively by the BSA, which are not used to
satisfy contractual obligations, other regulatory requirements, or
business purposes of the financial institution). The future annual PRA
hourly burden and cost estimate must take into consideration only the
information collected and recorded that is used exclusively to comply
with requirements under 31 CFR 1010.410, 1020.410, and 1022.420.
FinCEN seeks comments from the public regarding any questions we
should consider posing in future notices, in addition to the specific
questions for comment outlined directly below. Also, due to the
difficulty involved in estimating the number of transmittals of funds
conducted by MSBs, the number of funds transfers conducted by banks,
and the number of prepaid transactions conducted by MSBs, along with
the number of other types of transactions conducted financial
institutions, as described in this notice, FinCEN welcomes any
suggestions as to how to derive these estimates by using publicly
available financial information.
(d) Specific Questions for Comment Associated With Making and Retaining
Records Required by the Regulations Described in This Notice
(1) Complying With 31 CFR 1010.410(a) Through (c)
Is FinCEN's assertion correct that banks, credit unions,
FCMs, and MSBs are the only financial institutions that conduct
extensions of credit in excess of $10,000 (other than those secured by
real property)?
On average, how many extensions of credit in excess of
$10,000 (other than those secured by real property) does your financial
institution issue annually, which trigger the recordkeeping requirement
in 31 CFR 1010.410(a)?
Is FinCEN's assertion correct that banks, credit unions,
FCMs, and MSB are the only financial institutions that conduct
transactions which trigger the recordkeeping requirements in 31 CFR
1010.410(b) and (c)?
On average, how many transfers does your financial
institution conduct annually which trigger the recordkeeping
requirements in 31 CFR 1010.410(b) and (c)?
(2) Complying With 31 CFR 1010.410(e)
Is FinCEN's assertion correct that money transmitters are
the only nonbank financial institutions that conduct transmittals of
funds in the amount of $3,000 or more?
On average, how many transmittals of funds in the amount
of $3,000 or more does your MSB conduct annually when acting as the
transmitting, intermediary, or recipient MSB in a transmittal of funds?
On average, how long does it take your MSB to collect and
retain the records required to be maintained when you are acting as the
transmitting, intermediary, or recipient MSB in the transmittal of
funds?
(3) Complying With 31 CFR 1010.410(f)
Is FinCEN's assertion correct that banks, credit unions,
and money transmitters are the only financial institutions that act as
an intermediary financial institution in a funds transfer or
transmittal of funds?
On average, how often is your financial institution the
intermediary in a funds transfer or transmittal of funds?
[[Page 84113]]
On average, how long does it take your financial
institution to record and transmit the required information on a funds
transfer or transmittal of funds?
(4) Complying With 31 CFR 1020.410(a)
On average, how many funds transfers in the amount of
$3,000 or more does your bank conduct annually as the transmitting,
intermediary, or recipient bank in a funds transfer?
On average, how long does it take your financial
institution to collect and retain the records required to be maintained
when you are acting as the transmitting, intermediary, or recipient
bank in a funds transfer?
(5) Complying With 31 CFR 1020.410(c)
On average, how often does you bank conduct each of the
transactions described in 31 CFR 1020.410(c) as explained in further
detail in Section I?
On average, how long does it take your bank to collect and
retain the records required to be maintained when you conduct one of
the transactions described in 31 CFR 1020.410(c)?
(6) Complying With 31 CFR 1022.420
On average, how many of the following prepaid transactions
does your financial institution conduct: Access activations, loads,
reloads, purchases, withdrawals, transfers, and other prepaid access-
related transactions?
(e) General Request for Comments
Comments submitted in response to this notice will be summarized
and/or included in the request for OMB approval. All comments will
become a matter of public record. Comments are invited on: (i) Whether
the collection of information is necessary for the proper performance
of the functions of the agency, including whether the information shall
have practical utility; (ii) the accuracy of the agency's estimate of
the burden of the collection of information; (iii) ways to enhance the
quality, utility, and clarity of the information to be collected; (iv)
ways to minimize the burden of the collection of information on
respondents, including through the use of automated collection
techniques or other forms of information technology; and (v) estimates
of capital or start-up costs and costs of operation, maintenance, and
purchase of services to provide information.
Michael Mosier,
Deputy Director, Financial Crimes Enforcement Network.
[FR Doc. 2020-28364 Filed 12-22-20; 8:45 am]
BILLING CODE 4810-02-P