Seasoned Customer CTR Exemption Act of 2007

SEASONED CUSTOMER CTR EXEMPTION ACT OF 2007

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Ms. HIRONO. Madam Speaker, I rise in strong support of H.R. 323, the Seasoned Customer CTR Exemption Act. This bill eliminates a no-longer-necessary regulatory requirement which increases the costs of doing business for hundreds of financial institutions and their customers who ultimately bear the cost of this regulation.

H.R. 323 provides long overdue relief for our financial institutions from the requirement of keeping records and filing reports called Currency Transaction Reports (CTRs) to the Treasury Department for any financial transaction valued in excess of $10,000.00.

While the original purpose of the regulation, to identify suspected money laundering activities, was a commendable tool for Federal prosecutors, its utility has been adequately replaced since 1996 by the filing of Suspicious Activity Reports required by Treasury Department's Financial Crimes Enforcement Network. The CTRs are no longer the primary tool to identify suspected money laundering activities but banks must still file these reports, unless an exemption is given by the Department to certain ``qualified business customers.' The exemption procedures, however, have been found to be difficult to understand, cumbersome and still required the banks to obtain annual renewals.

This legislation will allow by statute the Treasury Department to issue regulations that would permit depository institutions to apply for an exemption from the requirement to file CTRs on a ``qualified customer.' The bill defines a qualified customer as any business organized or incorporated under state or federal law that has maintained a deposit account with the institution for at least twelve months and engaged in multiple currency transactions otherwise subject to the reporting requirement.

An estimated 30 percent of the 12 million CTRs received by the Treasury Department were filed on recurring customer transactions that were eligible for exemption under the current law. This bill will relieve financial institutions of the costly and unnecessary requirement to file CTRs in those instances and allow them to file a one-time notice of exemption for each qualified customer.

The Department will still be permitted where justified to suspend, reject or revoke such exemption notices to assure that it performs its legal duties. It also requires the department to report back within 3 years of enactment on the effects of the bill.

This bill is an example of Congress taking appropriate action after reviewing a regulatory requirement that made sense when first enacted but which no longer is needed. Too often, these burdensome requirements continue on the books to the detriment of our business community. Congress should continue to work with our business community to identity other instances of unnecessary regulations and requirements so that appropriate action can be taken.

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