Goodbye, $3,000 Log!
First Step of Regulatory Burden Relief Due Soon
In a move that is bound to make a lot of people happy in financial institution offices, an announcement is expected very shortly out of Washington, DC that the maintenance of a centralized $3,000 Log is history.
Financial institutions will no longer be required to record the cash sale of monetary instruments between $3,000 and $10,000 as they have in the past. According to the expected announcement, records of such sales should be "readily retrievable", but the in-depth information that was so time consuming will no longer be necessary.
When the $3,000 Log Rule first came out, financial institutions had to do a major training job to inform all front line personnel of the requirements. There were different pieces of data that had to be recorded, depending on whether the purchaser of the cashier's check, bank check, money order or travelers check was a customer or a non-customer.
In an attempt at relief from the massive necessary record-keeping, the Office of Financial Enforcement last year emphasized that if the financial institution did not sell monetary instruments to non-depositors, and only dealt with depositors making purchases of travelers checks, etc. with their own checks, they did not have to maintain a log at all. Unfortunately, most of the examiners were never given this information.
There were evidently several reasons for the decision to drop the $3,000 Log requirement. One was the extremely vocal objection of many compliance and training officers in financial institutions. Added to their objections were those of administrative officers about the cost of implementation of the rule, which was far in excess of projected estimates.
Logs of little use
But by far the most important factor was the inexplicably little use of the logs by investigating and prosecuting agencies. The only government agency that showed any interest at all in the maintaining and updating of the log were the examiners. The use of the logs came under scrutiny with the evaluation of procedures and forms due to the Regulatory Reduction Act.
Stan Morris, Director of Treasury's FinCEN (Financial Crimes Enforcement Network) said at the International Money Laundering Conference in Miami, that government agencies "never saw a piece of data they didn't want." But in the case of the logs, they never really found a use for the information that was being accumulated.
This will be a first, important step in reducing Bank Secrecy Act regulatory burden on financial institutions-and it will be a most welcome one. Training this time should not be a problem!
Copyright © 1994 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 5, No. 1, 8/94
First published on 08/01/1994