Agency Information Collection Activities; Proposed Renewal; Comment Request; Renewal Without Change of the Bank Secrecy Act Reports of Transactions in Currency Regulations at 31 CFR 1010.310 Through 1010.314, 31 CFR 1021.311, and 31 CFR 1021.313, and FinCEN Report 112-Currency Transaction Report, 29022-29030 [2020-10310]
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DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
Agency Information Collection
Activities; Proposed Renewal;
Comment Request; Renewal Without
Change of the Bank Secrecy Act
Reports of Transactions in Currency
Regulations at 31 CFR 1010.310
Through 1010.314, 31 CFR 1021.311,
and 31 CFR 1021.313, and FinCEN
Report 112—Currency Transaction
Report
Financial Crimes Enforcement
Network (FinCEN), Treasury.
ACTION: Notice and request for
comments.
AGENCY:
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 relating to reports of
transactions in currency. Under Bank
Secrecy Act regulations, financial
institutions are required to report
transactions in currency of more than
$10,000 using FinCEN Report 112 (the
currency transaction report, or CTR).
Although no changes are proposed to
the information collections themselves,
this request for comments covers a
proposed updated burden estimate for
the information collection. This request
for comments is made pursuant to the
Paperwork Reduction Act of 1995
(PRA).
DATES: Written comments are welcome,
and must be received on or before July
13, 2020.
ADDRESSES: Comments may be
submitted by any of the following
methods:
• Federal E-rulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
Refer to Docket Number FINCEN–2020–
0003 and the specific Office of
Management and Budget (OMB) control
numbers 1506–0004, 1506–0005, and
1506–0064.
• Mail: Policy Division, Financial
Crimes Enforcement Network, P.O. Box
39, Vienna, VA 22183. Refer to Docket
Number FINCEN–2020–0003 and OMB
control number 1506–0004, 1506–0005,
and 1506–0064.
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
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SUMMARY:
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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
frc@fincen.gov.
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) (Pub. L. 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 counter-money laundering
programs and compliance procedures.1
Regulations implementing Title II of the
BSA appear at 31 CFR Chapter X. The
authority of the Secretary to administer
the BSA has been delegated to the
Director of FinCEN.2
Under 31 U.S.C. 5313, the Secretary of
the Treasury is authorized to require
financial institutions to report currency
transactions exceeding $10,000.
Regulations implementing 31 U.S.C.
5313 are found at 31 CFR 1010.310
through 1010.314, 31 CFR 1021.311, and
31 CFR 1021.313. Generally,
information collected pursuant to the
BSA is confidential, but may be shared
as provided by law with regulatory and
law enforcement authorities.
II. Paperwork Reduction Act (PRA) 3
Title: Reports of Transactions in
Currency by Financial Institutions (31
CFR 1010.310 through 1010.314, 31 CFR
1021.311, and 31 CFR 1021.313).
OMB Control Numbers: 1506–0004,
1506–0005, and 1506–0064.4
1 Language expanding the scope of the BSA to
intelligence or counter-intelligence activities to
protect against international terrorism was added by
Section 358 of the USA Patriot Act.
2 Treasury Order 180–01 (re-affirmed Jan. 14,
2020).
3 Public Law 104–13, 44 U.S.C. 3506(c)(2)(A).
4 The reports of transactions in currency
regulatory requirements are currently covered
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Report Number: FinCEN Report 112—
Currency Transaction Report (CTR).
Abstract: FinCEN is issuing this
notice to renew the OMB control
numbers for the CTR regulations and the
CTR report.
Type of Review: Renewal without
change of currently approved
information collections.
Affected Public: Businesses or other
for-profit institutions, and non-profit
institutions.
CTR Regulations
Estimated Burden: An administrative
burden of one hour is assigned to each
of the CTR regulation OMB control
numbers in order to maintain the
requirements in force.5 The reporting
and recordkeeping burden is reflected in
FinCEN Report 112—CTR, under OMB
control number 1506–0064. The
rationale for assigning one burden hour
to each of the CTR regulation OMB
control numbers is that the annual
burden hours would be double counted
if FinCEN estimated burden in each
CTR regulation OMB control number
and in the FinCEN Report 112—CTR
OMB control number.
FinCEN Report 112—CTR
Type of Review:
• Propose for review and comment a
re-calculation of the portion of the PRA
burden that has been subject to notice
and comment in the past.
• Propose for review and comment a
method to estimate the portion of the
PRA burden that FinCEN previously
had not included.
Frequency: As required.
Estimated Reporting and
Recordkeeping Burden: The total
estimate of the annual reporting and
recordkeeping burden contained herein
consists of two parts: (a) a re-calculation
of the portion of the PRA burden that
FinCEN traditionally included in its
PRA renewal notices (the ‘‘traditional
PRA burden calculation’’); and (b) an
estimate of the portion of the total
burden that FinCEN previously did not
include in its PRA calculations (the
‘‘supplemental PRA burden
calculation’’).
under the following OMB control numbers: 1506–
0004 (General provisions—31 CFR 1010.310—
Reports of transactions in currency, 31 CFR
1010.311—Filing obligations for reports of
transactions in currency, 31 CFR 1010.312—
Identification required, 31 CFR 1010.313—
Aggregation, and 31 CFR 1010.314—Structured
transactions), and 1506–0005 (Rules for casinos and
card clubs—31 CFR 1021.311—Reports of
transaction in currency, and 31 CFR 1021.313—
Aggregation). OMB control number 1506–0064
applies to FinCEN Report 112—CTR.
5 One hour of burden is estimated under each of
the following OMB control numbers: 1506–0004
and 1506–0005.
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by the report that the filer does not need
for its own bookkeeping, and (b)
maintaining, updating, and upgrading
the technological infrastructure required
to file and store the report.
FinCEN’s traditional annual PRA
burden calculation associated with the
CTR previously included only the filer’s
annual operational burden and cost
associated with (a) producing and filing
the report, and (b) storing a copy of the
filed report. Starting with the current
PRA renewal notice, FinCEN intends to
add a supplemental PRA burden
calculation, reflecting the annual costs
involved in (a) obtaining data required
Part 1. Breakdown of the 2019 CTR
Filings
In 2019, 14,276 individual filers (the
filing population) submitted 16,087,182
CTRs (the 2019 CTR submissions). To
present a more complete breakdown of
the 2019 filing population, FinCEN
grouped filers into twelve tranches
according to the range of CTRs filed
during the year. The tranches are listed
in descending order starting with filers
accounting for the most CTRs filed
annually (‘‘01_LARGEST FILERS’’), to
filers submitting six or fewer CTRs
annually (‘‘12_1–6/YEAR), as set out in
Table 1 below.6
TABLE 1—2019 FILERS, BY RANGE OF THE NUMBER OF REPORTS FILED (TRANCHES), AND TYPE OF FINANCIAL
INSTITUTION
Casino card club
Tranche
Total filers
Total reports
Filers
Reports
Depository institution
Filers
Money services
business (MSB)
Reports
Filers
Other
Filers
Reports
Securities/futures
Reports
Filers
Reports
01_LARGEST_FILERS .........
02_100–2000/WEEK .............
03_50–99/WEEK ...................
04_10–49/WEEK ...................
05_5–9/WEEK .......................
06_121–259/YEAR ................
07_73–120/YEAR ..................
08_37–72/YEAR ....................
09_25–36/YEAR ....................
10_13–24/YEAR ....................
11_7–12/YEAR ......................
12_1–6/YEAR ........................
19
287
262
1,562
1,296
1,632
1,102
1,531
808
1,323
1,089
3,365
7,971,675
4,434,506
925,809
1,723,657
487,224
292,595
104,671
80,568
24,433
23,596
10,122
8,326
..................
73
56
159
87
77
53
66
28
41
39
106
..................
946
198,827
195,821
33,547
13,943
5,141
3,406
835
722
369
273
19
507
188
1,224
1,029
1,281
821
1,152
588
917
656
1,519
7,971,675
206
656,924
1,336,193
387,095
229,059
78,048
60,985
17,838
16,355
6,138
4,098
3,393,315
17
167
172
263
206
278
170
310
323
1,188
5
67,414
176,148
63,774
47,459
19,443
14,432
5,103
5,556
2,975
2,784
33,515
1
12
8
9
22
35
21
54
71
547
3
2,644
15,495
2,898
1,749
2,039
1,745
627
946
640
1,158
61,169
5
13
Grand Total ....................
14,276
16,087,182
785
1,399,301
9,600
14,157,723
3,099
438,603
783
9,110
9
445
Table 1 illustrates that in 2019, 19
filers (all of them depository
institutions) filed almost half of the
2019 CTR submissions (7,971,675
reports). These large filers submitted in
excess of 2,000 reports per week.7
Adding these numbers to the
submissions of filers that filed between
100 and 2,000 reports per week, totals
306 individual filers (or slightly over
2% of the filing population), accounting
for over three-quarters of the 2019 CTR
submissions (12,406,181 reports).8
Furthermore, depository institutions
represent two-thirds of the filing
population, and filed 88% of the 2019
CTR submissions. The high
concentration of filings in a very small
fraction of the filing population, and the
preponderance of depository
2
385
1
1
30
17
institutions at any tranche level will
impact the averages of both burden and
cost.9
All filers submit their reports
electronically, either in batch or discrete
form.10 Table 2 below sets out the
distribution of the 2019 CTR
submissions by tranche, filing method,
and type of financial institution.
TABLE 2—BREAK-DOWN OF 2018 CTR SUBMISSIONS, BY TRANCHE, FILING METHOD, AND TYPE OF FINANCIAL
INSTITUTION
Reports
Casino card club
Depository institution
Tranche
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Batch
Discrete
Total
Batch
Discrete
Batch
Discrete
Money services
business (MSB)
Batch
Other
Discrete
Batch
Securities/futures
Discrete
Batch
01_LARGEST_FILERS .......
02_100–2000/WEEK ...........
03_50–99/WEEK .................
04_10–49/WEEK .................
05_5–9/WEEK .....................
06_121–259/YEAR ..............
07_73–120/YEAR ................
08_37–72/YEAR ..................
09_25–36/YEAR ..................
10_13–24/YEAR ..................
11_7–12/YEAR ....................
12_1–6/YEAR ......................
7,937,017
4,304,983
835,918
1,261,192
265,191
111,215
29,528
16,042
3,289
2,993
688
347
34,658
129,523
89,891
462,465
222,033
181,380
75,143
64,526
21,144
21,303
9,434
7,979
7,971,675
443,4506
925,809
1,723,657
487,224
292,595
104,671
80,568
24,433
23,596
10,122
8,326
................
924,763
170,474
133,909
16,806
5,175
1,244
757
188
67
49
34
19
21,744
28,353
61,912
16,651
8,768
3,897
2,649
647
655
320
239
7,937,017
3,318,491
627,595
1,101,645
243,531
102,810
26,875
14,430
2,836
1,942
503
146
34,658
7,4824
29,329
234,548
143,564
126,249
51,173
46,555
15,002
14,413
5,635
3,952
12,621
37,849
24,353
4,854
2,971
1,409
855
265
263
136
158
20,894
29,565
151,795
58,920
44,488
18,034
13,577
4,838
5,293
2,839
2,626
49,108
................
1,285
................
................
................
................
................
21
640
9
12,061
2644
14210
2898
2,039
2,039
1,745
627
925
1,149
13
Grand Total ..................
14,767,703
1,319,479
16,087,182
1,253,466
145,835
13,377,821
779,902
85,734
352,869
50,423
40,687
259
6 The category ‘‘Other’’ includes filers belonging
to other types of financial institutions than the ones
identified in the table (such as insurance companies
and mutual funds), and some filers where the type
of financial institution was undetermined at the
time of the tabulation.
7 The annual range of the number of reports filed
by each large filer is between 110,000 and nearly
2,000,000 reports per year.
8 The 19 largest CTR filers plus 287 filers
reporting between 100 and 2,000 CTRs per week,
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18:29 May 13, 2020
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totals 306 filers. 7,971,675 CTRs reported by the 19
largest filers plus 4,434,506 CTRs reported by filers
reporting between 100 and 2,000 CTRs per week,
totals 12,406,181 reports.
9 As large filers that are depository institutions
account for a very large percentage of the 2019 CTR
submissions, the general averages of burden and
cost for the filer population will be greatly affected
by the characteristics of the filings of depository
institutions belonging to the first two tranches.
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Discrete
385
................
17
30
186
10 In batch-filing, a filer submits a single
electronic file containing several reports. In
discrete-filing, the filer fills in an electronic form
individually, using a data entry screen that FinCEN
provides. While exceptions apply, batch-filing is
generally used by large-volume filers that have
automated the filing process, while discrete-filing is
generally employed by filers that submit fewer
forms per year and rely more on manual data entry
methods.
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Table 2 shows that, in the aggregate,
there is a marked predilection for batch
filing among the filing population (92%
of the 2019 CTR submissions were
batch-filed). However, filers belonging
to any tranche combine batch and
discrete filing, with the preference
shifting from batch filing to discrete
filing as the number of reports filed per
year goes down. The aggregate
percentages also are influenced by the
concentration of submissions in the first
two tranches, and in the preponderance
of depository institutions in the filing
population. When focusing on
individual types of financial institution,
the percentage of batch filings vary
significantly (money services businesses
(MSBs), for example, file only 20% of
their reports in batch form).
The CTR requires the identification of
persons (i.e., entities or individuals) that
fulfill certain roles in the transaction or
group of transactions reflected in each
report, either as principals (e.g., a
person that conducts a transaction on its
own behalf, or a person on whose behalf
a transaction is conducted), or nonprincipals (e.g., a person that conducts
a transaction on behalf of another
person, or any currency transporters not
hired by the filer itself). The number of
persons per CTR varies significantly
among the 2019 CTR submissions.
Breakdowns of those transactions,
however, are available where a person
operated on its own behalf, or where the
person operating on behalf of another
did not need to be identified (e.g.,
transactions conducted through ATMs,
night deposit windows, or transported
by currency transporters hired by the
filer). Table 3 below sets out the
breakdowns.
TABLE 3—BREAKDOWN BY TRANCHE AND TYPE OF PERSON IDENTIFIED IN THE CTR
[Number of reports]
Conducted on own behalf
Tranche
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Depository
Information on transactor not required
Nondepository
Total
Depository
Total
Nondepository
Total
01_LARGEST_FILE .............................................
02_100–2000/WEEK ............................................
03_50–99/WEEK ..................................................
04_10–49/WEEK ..................................................
05_5–9/WEEK ......................................................
06_121–259/YEAR ...............................................
07_73–120/YEAR .................................................
08_37–72/YEAR ...................................................
09_25–36/YEAR ...................................................
010_13–24/YEAR .................................................
011_7–12/YEAR ...................................................
012_1–6/YEAR .....................................................
2,289,162
825,683
183,055
510,531
189,273
128,231
49,264
42,521
13,242
12,913
5,073
3,535
....................
961,259
227,272
277,878
68,176
43,146
18,927
15,155
5,637
5,895
3,398
3,456
2,289,162
1,786,942
410,327
788,409
257,449
171,377
68,191
57,676
18,879
18,808
8,471
6,991
2,279,428
660,123
109,655
239,409
68,963
41,436
14,223
10,321
2,545
2,209
625
379
....................
69,132
5,273
23,918
4,591
5,734
2,006
1,583
268
326
284
403
2,279,428
729,255
114,928
263,327
73,554
47,170
16,229
11,904
2,813
2,535
909
782
4,568,590
2,447,065
519,982
1,027,818
326,412
212,813
82,414
67,997
21,424
21,017
9,096
7,370
Grand Total ...................................................
4,252,483
1,630,199
5,882,682
3,429,316
113,518
3,542,834
9,311,998
In general, depository institutions will
only accept reportable transactions in
currency from established customers
subject to the institution’s customer
identification program (CIP).11
Therefore, if a depository institution’s
CTR identifies only one type of person,
typically that person is either an
established customer operating on its
own behalf, or the person on whose
behalf the transaction is conducted is an
established customer and the
transaction is conducted through a
transactor that does not need to be
identified. In these cases, a depository
institution’s CIP records for established
customers would provide the
identifying information needed to
complete a CTR. In addition, as a
prudential matter and prior to
completing a transaction, depository
institutions, for example, request
identification documents such as a
driver’s license to verify the identity of
the customer to protect against fraud.
Table 3 shows that depository
institutions filed 7,681,799 reports (or
11 For a description of the customer identification
program requirements, see 31 CFR 1001.220 and
Subpart B of 31 CFR Chapter X.
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54% of their 2019 CTR submissions)
where the only person identified in the
report was the person subject to the
filer’s CIP requirements.
Part 2. Re-Calculation of the
Traditional Annual PRA Burden and
Cost
Traditional Annual PRA Burden
(Expressed in Hours)
To comply with their BSA currency
transaction reporting requirement, filers
must implement, operate, and supervise
a process that may be broken down into
the following steps:
• Step 1: Determine whether the filer
must report a currency transaction or
group of transactions, based on the
amount of a transaction, the aggregation
of multiple transactions at the end of the
day, and certain characteristics of the
established customer, the transaction, or
the transactor (such as whether a
depository institution filer has
exempted an account of an established
customer from CTR filing). All these
determinations are based on objective
parameters.
• Step 2: Obtain the information
required by the CTR on parties to the
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Sfmt 4703
transaction that the filer has not already
identified as part of (i) its normal
business operations, (ii) another BSA
requirement (such as CIP), or (iii)
another regulatory requirement that is
not BSA-related. Some types of financial
institutions filing CTRs (e.g., depository
institutions) will already maintain most,
if not all, the information on parties to
the transaction in their customer
database and accounting records.
• Step 3: Complete the CTR with the
information on the transaction and the
parties involved. The completion of the
report will vary, depending on the
technology available to the filer, from a
fully-automated process requiring no
manual data entry, to a process that is
nearly entirely manual.
• Step 4: The filer will submit the
report electronically, either as a batch or
discrete filing. The method of
submission does not necessarily
indicate the level of automation of a
financial institution’s CTR filing
process. For example, some filers that
submit few reports a year batch file,
while other filers that submit more
reports may use discrete filing because
they have incorporated into their CTR
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filing process software tools that fill in
each form automatically and release it
after manual review of the content.
• Step 5: After filing, the filer must
store the report for the regulatory
recordkeeping period. As the
submission consists of an electronic file
containing one or several reports, the
recordkeeping will be done
electronically too.
The greater the reliance on
automation, the greater the periodic cost
involved in maintaining, updating, and
upgrading the systems and tools that
either link the filer’s different
applications to obtain the required
source data, or that are used for the CTR
completion, submission, and storage
steps.
FinCEN’s estimate of the traditional
annual hourly burden of the CTR
reporting and recordkeeping
discrete/individual reports, which
satisfies the recordkeeping part of the
requirement, the recordkeeping portion
of the traditional annual PRA burden
will be zero, and (b) the reporting
portion of the traditional annual PRA
burden will be set at a variable number
of minutes per report that will reflect
the (i) type of financial institution, (ii)
range of the number of reports filed per
year, and (iii) filing method.
For purposes of calculating PRA
burden and cost, FinCEN used the 2019
CTR submissions as a baseline,
stipulating that submissions from 2019
are an appropriate representation of the
expected composition of the filing
population and report submissions for
the next three years. FinCEN estimates
the time required for reporting a CTR,
based on these parameters, as described
in Table 4 below:
requirements only takes into
consideration the time required to
complete, submit, and store the report
(Steps 3 to 5 in the process described
above).
FinCEN has maintained the same
method to calculate the CTR PRA
burden hour estimate since 2002, when
paper reports typically were filled in
manually, mailed to the Internal
Revenue Service, and uploaded
individually. Under this method, the
burden estimates per CTR were 20
minutes for reporting, and 20 minutes
for recordkeeping per report, regardless
of the type of financial institution or
complexity of the report. Since 2011,
CTRs have been filed electronically,
either in batch or discrete format.
FinCEN has concluded that (a) as either
filing method allows the filer to save an
electronic copy of the batched or
TABLE 4—TRADITIONAL ANNUAL PRA BURDEN CALCULATIONS
Reports
Tranche
Batch-filed
Minutes per report
Discrete-filed
Batch
Total hours
Discrete
Batch
D
ND
D
ND
D
ND
D
Discrete
Grand
total
(hours)
ND
01_LARGEST_FILERS .............................
02_100–2000/WEEK .................................
All other tranches ......................................
7,937,017
3,318,491
2,122,313
0
986,492
403,390
34,658
74,824
670,420
0
54,699
484,878
1
1
20
1
1
20
20
20
20
20
20
20
132,284
71,750
841,901
11,553
43,174
385,099
143,836
114,924
1,227,000
Total ...................................................
13,377,821
1,389,882
779,902
539,577
........
........
........
........
1,045,934
439,826
1,485,761
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D: Depository Institution.
ND: Non-depository Institution.
The traditional annual PRA burden
estimated by this new method
(1,485,761 hours) is significantly lower
than what FinCEN had calculated in the
past. Table 4 reflects the following
rationale for purposes of the new
estimate:
• FinCEN considers the reporting
time required by both depository and
non-depository financial institutions
belonging to the same tranche of filers
(based on number of reports filed), to be
the same.12
• FinCEN stipulates that filers
submitting 100 reports per week or
more, are doing so in a totally
automated way (‘‘fully-automated
filers’’).
• If a fully-automated filer submits
reports through batch filing, the
individual reports and the batch file that
contains them are produced
automatically, without manual
intervention. The burden of 1 minute
per report represents the administrative
burden involved in carrying out,
reviewing, and overseeing the process of
12 However, whether the institution is depository
or non-depository will have an effect when
combining the traditional annual PRA burden with
the supplemental PRA, as described in Part 3
below.
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filing CTRs, and not just the time of
preparation and submission per report
which would be nearly instantaneous,
and therefore far lower than 1 minute
per individual report.
• Where the filing does not involve a
fully-automated filer submitting reports
through batch filing, FinCEN allocates
20 minutes per report to reports filed on
(a) a discrete basis by fully-automated
filers, or (b) either a batch or discrete
basis by any filer submitting fewer than
100 reports per week. The 20 minutes
includes the administrative burden and
the actual time required to enter the
individual report in FinCEN’s data entry
screen, or to complete the individual
report manually before it is added to the
batch file. This allocation of time is
extremely conservative: FinCEN is
stipulating that filers submitting fewer
than 100 reports per week are not
automated and that, regardless of the
filing method, each report will require
full manual data entry intervention.
Similarly, FinCEN stipulates that fullyautomated filers that file discretely will
not receive the benefits of any
automation, and will incur the same
burden per report.
FinCEN intends to conduct more
granular studies of the filing population
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in the future, to arrive at more accurate
estimates that take into consideration a
more granular breakdown of the degree
of automation among CTR filers. The
data obtained in these studies may
result in significant variations of the
estimated annual PRA burden hours.
Cost of the Traditional Annual PRA
Burden
To estimate the cost of each hour of
the traditional annual PRA burden,
FinCEN identified three types of roles
and corresponding staff positions
involved in the reporting and
recordkeeping of CTRs: (1) Remote
supervision (general process oversight),
(ii) direct supervision (review of the
filing process, and cross-check of filings
against accounting records), and (iii)
operations (actual production, filing,
and storage of the reports). FinCEN
calculated the fully loaded hourly wage
for each of these three roles by taking
the median wage for these positions as
estimated by the U.S. Bureau of Labor
Statistics (BLS), and computing an
additional cost of benefits as follows: 13
13 See U.S. Bureau of Labor Statistics,
Occupational Employment Statistics-National, May
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TABLE 5—TOTAL HOURLY REMUNERATION (FULLY-LOADED HOURLY WAGE) PER ROLE AND BLS JOB POSITION
Role
BLS-Code
Remote Supervision ..........................
Direct Supervision .............................
Operations .........................................
Median hourly
wage
BLS-Name
11–3031
13–1041
43–3071
Financial Manager ............................
Compliance Officer ...........................
Teller ................................................
$62.45
33.20
15.02
1.502
1.502
1.502
Fully-loaded
hourly wage
$93.80
49.87
22.56
represent operations work. Multiplying
the fully-loaded hourly wage from Table
5 by the proportion of time FinCEN
estimates each role spends on the CTR
process, FinCEN arrives at a weighted
average hourly cost, set out below:
annual PRA burden may be allocated to
the different roles as follows: 1% of the
burden will represent the work of
remote supervision, 9% of the burden
will represent the work of direct
supervision, and the remainder will
FinCEN estimates that, on average,
each role would spend different
amounts of time on the CTR reporting
and recordkeeping requirements.
FinCEN further estimates that the total
number of hours of the traditional
Benefit factor
TABLE 6—WEIGHTED AVERAGE HOURLY COST
Component
Remote Supervision
%
time
Hourly
cost
%
time
Hourly
cost
%
time
Hourly
cost
Weighted
average
hourly
cost
Recordkeeping and reporting ................................
1
$93.80
9
$49.87
90
$22.56
$25.73
Operations
For purposes of estimating the annual
burden of obtaining and verifying
information on the parties to a
reportable transaction or group of
transactions (the ‘‘ID-related annual
PRA burden’’), FinCEN consolidates the
types of financial institution filing CTRs
into two major groups, depository and
non-depository institutions, and
stipulates the following:
1. Depository institutions report CTRs
where the principal—the person on
whose behalf the transaction is
conducted (either when the person is
operating by itself or through a different
person)—is an established customer
subject to CIP.14 All depository
institutions verify and record the
customer identification information on
the principals required by the CTR.
Therefore, FinCEN assigns no PRA
burden to obtaining, verifying, and
recording the information on principals
of currency transactions reported by
depository institutions (‘‘ID-related PRA
burden’’).15
2. Non-depository institutions may or
may not restrict their reportable
currency transactions to established
customers. Conservatively, FinCEN
assigns an ID-related PRA burden of
three minutes per person for a nondepository institution to obtain, verify,
and record the required information to
file a CTR on any principal (either a
person conducting a currency
transaction on its own behalf, or a
person on whose behalf the transaction
was conducted).
3. Neither depository nor nondepository institutions likely maintain
in their records the information required
by a CTR about a person conducting a
transaction on behalf of another person.
Therefore, FinCEN assigns an ID-related
PRA burden of three minutes per person
for an institution to collect the required
information to file a CTR on a person
conducting a transaction on behalf of
another person.
4. The CTR requires the reporting of
currency transporters operating on
behalf of any party that is not the filer.16
The information required involves the
legal person (for example, the armored
car service company), and not the
individual natural person performing
the physical transportation. There are a
limited number of currency transporters
conducting transactions with depository
or non-depository institutions whose
information must be on file for physical
security reasons (such as controlling
access to the vault). Therefore, FinCEN
assigns an ID-related PRA burden of one
minute per currency transporter for an
institution to collect the required
information to file a CTR on the
currency transporter.
To arrive at the estimate of the total
ID-related annual PRA burden, FinCEN
counted the number of each of the four
types of persons (i.e., a person operating
on its own behalf, a person on whose
behalf the transaction is conducted, a
person conducting the transaction on
2019, available at https://www.bls.gov/oes/
tables.htm. The most recent data from the U.S.
Bureau of Labor Statistics corresponds to May 2019.
For 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, credit intermediation and
related activities is $15.80 (hourly benefits)/$31.45
(hourly wages) = 0.502. The benefit factor is 1 plus
the benefit/wages ratio, or 1.502. Multiplying each
hourly wage by the benefit factor produces the
fully-loaded hourly wage per position.
14 For the regulatory definition of ‘established
customer’, see 31 CFR 1010.100(p).
15 This stipulation is grounded in FinCEN’s
review of the 2019 CTR submissions. In CTRs filed
by depository institutions, the filer reported a
transactional account belonging to either the person
conducting the transaction on its own behalf, or to
the person on whose behalf the transaction was
conducted, in over 98% and 94% of the cases,
respectively, while the remaining reports had
incomplete information in the respective sections.
16 See FIN–2013–R001, ‘‘Treatment of Armored
Car Service Transactions Conducted on Behalf of
Financial Institution Customers or Third Parties for
Currency Transaction Report Purposes’’, July 12,
2013.
FinCEN multiplied the total hours per
filer type from Table 4 (1,485,761
hours), by the weighted average hourly
cost from Table 6 ($25.73 per hour), and
estimated the cost of the traditional
annual PRA burden to be $38,228,631.
Part 3. Estimate of the Supplemental
Annual PRA Burden
FinCEN intends to add a
supplemental PRA burden calculation,
reflecting the annual PRA burden and
cost involved in (a) obtaining data
required by the CTR that the filer does
not need for its own bookkeeping, and
(b) maintaining, updating, and
upgrading the technological
infrastructure required to file and store
the CTRs.
Annual Hourly PRA Burden of
Obtaining Source Data
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Direct supervision
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behalf of another, and a currency
transporter operating on behalf of a
person other than the filer) in each 2019
CTR submission, and multiplied the
total of each type of person identified in
each report by the corresponding
individual ID-related PRA burden, as
defined above. The breakdown of the
total ID-related PRA annual burden is
described in Table 7 below.17
TABLE 7—TOTAL ANNUAL PRA BURDEN OF OBTAINING AND VERIFYING PERSONAL INFORMATION
[Minutes and hours]
Depository
Non-depository
TRANCHE
Total minutes
Principals
Non-principals
Principals
Total hours
Non-principals
01_LARGEST_FILERS ............................
02_100–2000/WEEK ................................
All other tranches .....................................
0
0
0
12,905,258
6,973,483
4,928,268
0
3,179,679
2,846,334
0
60,264
640,998
12,905,258
10,213,426
8,415,600
215,087
170,224
140,260
Total ..................................................
0
24,807,009
6,026,013
701,262
31,534,284
525,571
The total ID-related annual PRA
burden estimated by this method is
525,571 hours.
Cost of Annual PRA Burden of
Obtaining Source Data
FinCEN multiplied the total hours per
filer type from Table 7 (525,571 hours),
by the weighted average hourly cost
from Table 6 ($25.73),18 and estimated
the cost of the total ID-related PRA
annual burden to be $13,522,942.
Annual PRA Cost and Burden of
Maintaining and Upgrading Hardware
and Software
It is difficult for FinCEN to separately
estimate the annual cost and hourly
burden a financial institution bears in
maintaining the hardware and software
for the CTR requirement itself (the
‘‘technology-related annual PRA cost’’
and the ‘‘technology-related annual PRA
burden’’ of the CTR, respectively).
FinCEN understands that most large
financial institutions maintain highly
integrated software and hardware
systems for anti-money laundering and
safety and soundness purposes that
leverage the existing need to maintain
records and information about
customers and transactions for business
reasons. Given the difficulties of
calculating such a cost estimate, FinCEN
attempted to estimate a percentage of
the supplemental burden for this report
using data collected in a previous
rulemaking effort. While not exact, this
is the best information FinCEN
currently has to prepare an estimate
which likely represents the outer limit
of the technology-related costs relative
to the total cost.
In 2008, FinCEN surveyed certain
depository institutions and money
transmitters to assess the costs to set up
and maintain the reporting of crossborder electronic transmittal of funds
(CBETF) data above certain thresholds
(the ‘‘2008 Survey’’).19 Seventy-five
depository institutions and six money
transmitters involved in international
transmittals of funds responded to the
survey. In the case of depository
institutions, the survey identified
proportionally each type of cost
involved in setting up the reporting
process, and the ongoing cost involved
in complying annually with the
proposed CBETF reporting obligation.20
The breakdown of the annual ongoing
reporting compliance costs is reflected
in Table 8 below.
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TABLE 8—PROPORTION OF COMPONENTS OF ANNUAL PRA BURDEN
PERSONNEL ........................................
ONGOING MANAGEMENT ..................
OTHER ..................................................
TESTING ...............................................
TRAINING .............................................
CONSULTING .......................................
45%
23.00%
12.00%
2.00%
2.00%
1.00%
85.00%
HARDWARE .........................................
IT ...........................................................
SOFTWARE DEVELOPMENT .............
6.00%
6.00%
3.00%
15.00%
TOTAL ...........................................
100.00%
100.00%
COST COMPONENTS INCLUDED IN TRADITIONAL
AND ID-RELATED ANNUAL PRA BURDEN
COST COMPONENTS NOT INCLUDED IN
TRADITIONAL AND ID-RELATED ANNUAL PRA
BURDEN
The absolute ongoing cost per
component estimated by the 2008
Survey respondents relate to the CBETF
reporting, and therefore cannot be used
to extrapolate the costs of another
reporting or recordkeeping requirement.
17 The column ‘‘Principals’’ includes the PRA
burden of ‘‘persons conducting a transaction on
their own behalf’’, and ‘‘persons on whose behalf
the transaction was conducted’’ by somebody else.
The column ‘‘Non_Principals’’ includes the PRA
burden of ‘‘persons conducting a transaction on
behalf of others’’ and ‘‘currency transporters
working for a person other than the filer.’’
Principals carry a zero PRA burden for depository
institutions, and a 3-minute PRA burden per
individual person identified in each report for nondepository institutions. In the case of Non-
Principals, ‘‘persons conducting a transaction on
behalf of others’’ carry a 3-minute PRA burden per
person identified in each report, regardless of the
filer type, and ‘‘currency transporters working for
a person other than the filer’’ carry a PRA burden
of one minute per individual currency transporter
identified in each report, regardless of the filer type.
18 FinCEN stipulates that the weights used to
calculate the weighted average costs in Table 6 are
appropriate weights for the calculation of the
weighted average costs for the obtaining of source
data.
19 FinCEN’s 2008 Cross-Border Electronic Funds
Transfer Survey Final Report is set out in Appendix
C of FinCEN’s January 2009 study on the
Implications and Benefits of Cross-Border Funds
Transmittal Reporting, available at https://
www.fincen.gov/sites/default/files/shared/
ImplicationsAndBenefitsOfCBFTR.pdf (‘‘January
2009 Study’’).
20 Appendix C of the January 2009 Study, page
15.
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While the absolute costs may not be
extrapolated to another requirement, the
proportion of the annual ongoing
compliance costs provided by the
depository institution respondents to
the 2008 Survey can be used to
extrapolate an estimate of the
technology-related PRA cost (15% of the
total cost) for fully-automated filers.
FinCEN assesses such a method is valid
because the CTR and CBETF reporting
and recordkeeping requirements are
similar with respect to the objective
nature of the reporting triggered by
threshold amounts of transactions.
Given the limited information at its
disposal regarding the technologyrelated costs associated with the filing
of CTRs, FinCEN is using the
proportions of the cost components
reported by depository institutions to
extrapolate the total annual technologyrelated PRA cost, as CTRs filed by
depository institutions represent 88% of
all CTRs filed in 2019. In addition,
FinCEN believes the proportionality of
ongoing costs derived from the 2008
Survey is still useful today
notwithstanding changes in costs over
time. Not only has the cost of hardware
dropped considerably between 2008 and
2019, but the personnel cost associated
with software development and
information technology management
has increased on par with, or slightly
less than, the cost of personnel included
in the traditional PRA estimate; in other
words, the changes in costs of the
different components of the information
technology investment have grown at a
slower pace than the traditional annual
PRA cost estimate.21
Based on the revised estimate of the
traditional annual PRA burden (as
described in Part 2 above), and the
estimate of the additional ID-related
annual PRA burden described in the
earlier sections of this Part, the PRA
burden and cost for all filers (without
including a technology component) are
described in Table 9 and Table 10
below, respectively.
Based on the proportions described in
Table 8 above, the traditional and IDrelated annual PRA costs of fullyautomated filers estimated in Table 10
(the ‘‘Table 10 PRA cost’’) constitute
85% of the total annual PRA cost of
reporting and recordkeeping incurred by
such filers, with the remaining 15% of
costs corresponding to the technologyrelated PRA cost (i.e., maintenance,
updates and upgrades of software,
general information technology support,
and hardware replacement). To estimate
the total annual PRA costs for fullyautomated filers to file CTRs (a
calculation that adds the cost of the
traditional and ID-related annual PRA
burden to the newly estimated
technology-related PRA cost), FinCEN
discounts the Table 10 PRA cost by its
contribution to the total annual PRA
cost ($16,571,966/0.85), resulting in a
total annual PRA cost for fullyautomated filers of $19,496,430.
Determining the hourly burden of
some cost components of the
technology-related annual PRA burden,
such as the price of new hardware, is
not straightforward. The method
FinCEN followed to estimate the
technology-related annual PRA cost
does not provide a definitive way for
deriving the burden hours attributable
to each cost component. To produce
such an estimate, FinCEN would have
needed information not provided in the
2008 Survey (such as the participation
of different levels of technology-related
labor and their fully-loaded
compensation rates). FinCEN, however,
believes that it is appropriate to estimate
the total annual PRA hourly burden for
fully-automated filers using a
calculation similar to the one employed
for the total annual PRA cost. FinCEN
stipulates that the traditional and IDrelated PRA burden for fully-automated
filers set out in Table 9 above (the
‘‘Table 9 PRA burden’’) also constitutes
85% of the total annual PRA burden of
such filers. FinCEN discounts the Table
9 PRA burden by its contribution to the
total annual PRA burden (644,072
hours/0.85), and arrives at a total annual
21 See footnote 8. See also, Bureau of Labor
Statistics, Occupational Employment StatisticsNational, May 2008, available at https://
www.bls.gov/oes/tables.htm. Between 2008 and
2019, for example, the median hourly wage for
financial managers, compliance officers, and tellers
went up 17.41%, 28.43%, and 28.82%,
respectively, while the same metric went up only
8.27% and 20.03% for software developers and
programmers and network and computer system
administrators, respectively.
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PRA burden for fully-automated filers of
757,732 hours.22 This equals the sum of
the traditional annual PRA burden and
the ID-related annual PRA burden
(644,072 hours or 38,644,260 minutes),
and the technology-related annual PRA
burden (113,660 hours or 6,819,583
minutes).
In the future, FinCEN intends to
conduct studies of the filing population
to more accurately estimate the
contribution of technology-related costs
to the total annual PRA burden. These
future studies will incorporate a more
granular breakdown of the degree of
automation among CTR filers, and may
result in significant variations of the
estimated annual PRA burden. Among
other things, FinCEN will need to
segregate the technology costs
associated exclusively with BSA
reporting, recordkeeping, and
monitoring requirements, from the
technology costs involved in (i)
complying with other regulatory
frameworks, and/or (ii) processing data
used for the filer’s other business
purposes.
Estimated Reporting and
Recordkeeping Burden: The average
estimated PRA burden, measured in
minutes per report, is 8 minutes, as
described in Table 11 below:
Estimated Number of Respondents:
14,276 financial institutions.23
Estimated Total Annual Responses:
16,087,182.24
Estimated Total Annual Reporting
and Recordkeeping Burden: The
estimated total annual PRA burden is
2,124,992 hours, as described in Table
12 below.
Estimated Total Annual Reporting
and Recordkeeping Cost: At the
weighted average hourly cost of $25.73
described in Table 6 above, the cost of
the estimated total annual PRA reflected
in Table 12 (2,124,992 hours) is
$54,676,044.
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.
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 the calculation of the total
PRA burden of filing the CTR, under the
current regulatory requirements.
Specifically, comments are invited on
the following issues:
1. FinCEN has broken down the
process required to comply with the
CTR requirement into several steps,
from identifying a transaction that must
be reported, to maintaining and
upgrading software required for the
completion, submission, and storage of
the report. In general, do these steps
reflect the filer’s own general
experience? Is there a need to include a
more granular breakdown of the process
to describe what, on average, a CTR filer
must do?
2. For purposes of calculating PRA
burden and cost, FinCEN has taken the
2019 CTR submissions number as a
baseline, stipulating that it is an
22 This calculation uses the cost per burden hour
estimate of $25.73 per hour derived through the
previous estimates even though the costs per hour
in the context of maintaining, updating, and
upgrading the hardware and software are different.
Of importance here is FinCEN’s confidence in the
overall costs reflected in this assessment, even if
there is less confidence in the notional number of
burden hours associated with the supplemental
cost.
23 See Part 1-Table 1 for a breakdown of the types
of financial institutions that filed CTRs in 2019.
Note that all banks, casinos and card clubs, MSBs,
brokers or dealers in securities, mutual funds,
futures commissions merchants and introducing
brokers in commodities are required to comply with
the CTR regulatory requirement, however, not all
financial institutions conduct transactions that
would trigger the CTR filing requirements. See 31
CFR 1020.310 (banks), 31 CFR 1021.310 (casinos
and card clubs), 31 CFR 1022.310 (MSBs), 31 CFR
1023.310 (brokers or dealers in securities), 31 CFR
1024.310 (mutual funds), and 31 CFR 1026.310
(futures commissions merchants and introducing
brokers in commodities).
24 Numbers are based on actual 2019 filings as
reported by the BSA E-Filing System as of 12/31/
2019. This number reflects the total number of
filings for both the legacy CTR and CTRC and the
new FinCEN Report 112—CTR.
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appropriate representation of the
expected composition of the filing
population and report submissions for
the next three years. Is that an
appropriate assumption? Are there
expected changes in either the
composition of the filing population or
the breakdown of the report
submissions over the next three years
that should be factored into FinCEN’s
estimates?
3. FinCEN estimates that, on average,
the time involved in the reporting of a
CTR varies in accordance with the range
of the total number of reports filed per
year (i.e., filers filing 100 reports or
more per week are totally automated),
the type of financial institution and type
of transaction (i.e., depository financial
institutions engaging in reportable
currency transactions that only involve
established customers), and filing
method (i.e., completion of reports filed
on a discrete basis generally involve
more manual data entry than those
batch-filed, regardless of the filer’s level
of automation). Are these assumptions
reasonable? Are there other factors that
may affect the amount of time involved
in preparing, reviewing, and filing the
report, which FinCEN could quantify by
analyzing the contents of the BSA
database and without conducting a
formal survey of the reporting financial
institutions?
4. FinCEN estimates that the
completion, review, and submission of
a CTR will demand a certain number of
minutes per report, depending on the
factors listed above. On average, is the
estimated number of minutes per report
reasonable, by degree of automation of
the filer, type of financial institution the
filer is, method of filing, types of
financial institution labor positions
involved, and allocated time per labor
position?
5. FinCEN estimates that, on average,
the cost of labor involved in the
completion, review, and submission of
a CTR will depend on at least three
different levels of staff involvement
within the filer’s organization (i.e.,
remote supervision, direct supervision,
and operations) participating in the
process for different portions of the CTR
process. On average, is the allocation of
time and hourly cost plus benefits per
organizational level reasonable? Has
FinCEN identified the right level of
involvement and the right type of labor
position per role?
6. FinCEN estimated the ID-related
PRA burden by stipulating that
depository institutions conduct
reportable transactions only with
established customers, while nondepository institutions conduct
transactions with non-established
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customers. Is this stipulation
reasonable? Is there another factor that
would allow FinCEN to determine when
a non-depository institution conducts a
transaction with an established
customer, and therefore its ID-related
PRA cost is lower than the current
estimate? FinCEN allocated an IDrelated PRA cost of three minutes to
persons conducting a transaction on
behalf of another, for any type of
financial institution. Is this allocation
always required, or are there instances
where the filer has already obtained,
verified, and retained the personal data
of the transactor, and therefore the
allocation could be lower, or even
eliminated altogether?
7. FinCEN estimated the technologyrelated PRA burden on the assumption
that, on average, the percentage
breakdown of the total cost among
different cost factors is mostly constant
among analogous reporting obligations.
Based on a previous industry survey,
FinCEN based the estimates of total
annual PRA burden on the premise that
traditional and ID-related annual PRA
costs amount to 85% of the total annual
PRA cost of fully-automated filers,
while software, hardware, and systemsrelated costs, including maintenance,
updates and upgrades represent the
remaining 15%. Is there existing
evidence that may indicate that one or
both of these assumptions are not
reasonable? Is there another factor or
combination of factors that would assist
FinCEN in determining which filers that
file fewer than 100 reports a week may
also be fully or partially automated, and
therefore adjust the technology-related
PRA cost?
8. The estimate of the technologyrelated PRA burden relies on the
principle that the system maintenance,
hardware maintenance and
replacement, and other technological
costs included in the estimate relate to
hardware and software resources used
exclusively for CTR filing. If such
resources are used for multiple
purposes, only a fraction of their cost
that represents their use for complying
with this BSA obligation should be
included in the PRA burden estimate. Is
this assumption correct? Is this
assumption provable by objective
methods? Has your financial institution
determined what percentage of its
technology is used for CTR purposes?
How can FinCEN determine which
resources, if any, are used for purposes
other than BSA compliance, and
therefore adjust the PRA estimate?
9. Please provide any other comments
on calculation methods, assumptions,
stipulations, or any other issues that
may impact the total PRA burden
PO 00000
Frm 00104
Fmt 4703
Sfmt 4703
calculation of the regulations or the
report.
b. 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: (a) 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;
(b) the accuracy of the agency’s estimate
of the burden of the collection of
information; (c) ways to enhance the
quality, utility, and clarity of the
information to be collected; (d) 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 (e) estimates of capital
or start-up costs and costs of operation,
maintenance, and purchase of services
to provide information.
Dated: May 8, 2020.
Derek Baldry,
Deputy Chief of Staff, Financial Crimes
Enforcement Network.
[FR Doc. 2020–10310 Filed 5–13–20; 8:45 am]
BILLING CODE 4810–02–P
DEPARTMENT OF VETERANS
AFFAIRS
[OMB Control No. 2900–0021]
Agency Information Collection
Activity: VA Loan Electronic Reporting
Interface (Valeri) System
Veterans Benefits
Administration, Department of Veterans
Affairs.
ACTION: Notice.
AGENCY:
In compliance with the
Paperwork Reduction Act (PRA) of
1995, this notice announces that the
Veterans Benefits Administration,
Department of Veterans Affairs, will
submit the collection of information
abstracted below to the Office of
Management and Budget (OMB) for
review and comment. The PRA
submission describes the nature of the
information collection and its expected
cost and burden and it includes the
actual data collection instrument.
DATES: Written comments and
recommendations for the proposed
information collection should be sent
within 30 days of publication of this
notice to www.reginfo.gov/public/do/
PRAMain. Find this particular
information collection by selecting
SUMMARY:
E:\FR\FM\14MYN1.SGM
14MYN1
Agencies
[Federal Register Volume 85, Number 94 (Thursday, May 14, 2020)]
[Notices]
[Pages 29022-29030]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10310]
[[Page 29022]]
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DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
Agency Information Collection Activities; Proposed Renewal;
Comment Request; Renewal Without Change of the Bank Secrecy Act Reports
of Transactions in Currency Regulations at 31 CFR 1010.310 Through
1010.314, 31 CFR 1021.311, and 31 CFR 1021.313, and FinCEN Report 112--
Currency Transaction Report
AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury.
ACTION: Notice and request for comments.
-----------------------------------------------------------------------
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 relating
to reports of transactions in currency. Under Bank Secrecy Act
regulations, financial institutions are required to report transactions
in currency of more than $10,000 using FinCEN Report 112 (the currency
transaction report, or CTR). Although no changes are proposed to the
information collections themselves, this request for comments covers a
proposed updated burden estimate for the information collection. This
request for comments is made pursuant to the Paperwork Reduction Act of
1995 (PRA).
DATES: Written comments are welcome, and must be received on or before
July 13, 2020.
ADDRESSES: Comments may be submitted by any of the following methods:
Federal E-rulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments. Refer to Docket Number
FINCEN-2020-0003 and the specific Office of Management and Budget (OMB)
control numbers 1506-0004, 1506-0005, and 1506-0064.
Mail: Policy Division, Financial Crimes Enforcement
Network, P.O. Box 39, Vienna, VA 22183. Refer to Docket Number FINCEN-
2020-0003 and OMB control number 1506-0004, 1506-0005, and 1506-0064.
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) (Pub. L. 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 counter-money laundering programs and compliance
procedures.\1\ Regulations implementing Title II of the BSA appear at
31 CFR Chapter X. The authority of the Secretary to administer the BSA
has been delegated to the Director of FinCEN.\2\
---------------------------------------------------------------------------
\1\ Language expanding the scope of the BSA to intelligence or
counter-intelligence activities to protect against international
terrorism was added by Section 358 of the USA Patriot Act.
\2\ Treasury Order 180-01 (re-affirmed Jan. 14, 2020).
---------------------------------------------------------------------------
Under 31 U.S.C. 5313, the Secretary of the Treasury is authorized
to require financial institutions to report currency transactions
exceeding $10,000. Regulations implementing 31 U.S.C. 5313 are found at
31 CFR 1010.310 through 1010.314, 31 CFR 1021.311, and 31 CFR 1021.313.
Generally, information collected pursuant to the BSA is confidential,
but may be shared as provided by law with regulatory and law
enforcement authorities.
II. Paperwork Reduction Act (PRA) \3\
---------------------------------------------------------------------------
\3\ Public Law 104-13, 44 U.S.C. 3506(c)(2)(A).
---------------------------------------------------------------------------
Title: Reports of Transactions in Currency by Financial
Institutions (31 CFR 1010.310 through 1010.314, 31 CFR 1021.311, and 31
CFR 1021.313).
OMB Control Numbers: 1506-0004, 1506-0005, and 1506-0064.\4\
---------------------------------------------------------------------------
\4\ The reports of transactions in currency regulatory
requirements are currently covered under the following OMB control
numbers: 1506-0004 (General provisions--31 CFR 1010.310--Reports of
transactions in currency, 31 CFR 1010.311--Filing obligations for
reports of transactions in currency, 31 CFR 1010.312--Identification
required, 31 CFR 1010.313--Aggregation, and 31 CFR 1010.314--
Structured transactions), and 1506-0005 (Rules for casinos and card
clubs--31 CFR 1021.311--Reports of transaction in currency, and 31
CFR 1021.313--Aggregation). OMB control number 1506-0064 applies to
FinCEN Report 112--CTR.
---------------------------------------------------------------------------
Report Number: FinCEN Report 112--Currency Transaction Report
(CTR).
Abstract: FinCEN is issuing this notice to renew the OMB control
numbers for the CTR regulations and the CTR report.
Type of Review: Renewal without change of currently approved
information collections.
Affected Public: Businesses or other for-profit institutions, and
non-profit institutions.
CTR Regulations
Estimated Burden: An administrative burden of one hour is assigned
to each of the CTR regulation OMB control numbers in order to maintain
the requirements in force.\5\ The reporting and recordkeeping burden is
reflected in FinCEN Report 112--CTR, under OMB control number 1506-
0064. The rationale for assigning one burden hour to each of the CTR
regulation OMB control numbers is that the annual burden hours would be
double counted if FinCEN estimated burden in each CTR regulation OMB
control number and in the FinCEN Report 112--CTR OMB control number.
---------------------------------------------------------------------------
\5\ One hour of burden is estimated under each of the following
OMB control numbers: 1506-0004 and 1506-0005.
---------------------------------------------------------------------------
FinCEN Report 112--CTR
Type of Review:
Propose for review and comment a re-calculation of the
portion of the PRA burden that has been subject to notice and comment
in the past.
Propose for review and comment a method to estimate the
portion of the PRA burden that FinCEN previously had not included.
Frequency: As required.
Estimated Reporting and Recordkeeping Burden: The total estimate of
the annual reporting and recordkeeping burden contained herein consists
of two parts: (a) a re-calculation of the portion of the PRA burden
that FinCEN traditionally included in its PRA renewal notices (the
``traditional PRA burden calculation''); and (b) an estimate of the
portion of the total burden that FinCEN previously did not include in
its PRA calculations (the ``supplemental PRA burden calculation'').
[[Page 29023]]
FinCEN's traditional annual PRA burden calculation associated with
the CTR previously included only the filer's annual operational burden
and cost associated with (a) producing and filing the report, and (b)
storing a copy of the filed report. Starting with the current PRA
renewal notice, FinCEN intends to add a supplemental PRA burden
calculation, reflecting the annual costs involved in (a) obtaining data
required by the report that the filer does not need for its own
bookkeeping, and (b) maintaining, updating, and upgrading the
technological infrastructure required to file and store the report.
Part 1. Breakdown of the 2019 CTR Filings
In 2019, 14,276 individual filers (the filing population) submitted
16,087,182 CTRs (the 2019 CTR submissions). To present a more complete
breakdown of the 2019 filing population, FinCEN grouped filers into
twelve tranches according to the range of CTRs filed during the year.
The tranches are listed in descending order starting with filers
accounting for the most CTRs filed annually (``01_LARGEST FILERS''), to
filers submitting six or fewer CTRs annually (``12_1-6/YEAR), as set
out in Table 1 below.\6\
---------------------------------------------------------------------------
\6\ The category ``Other'' includes filers belonging to other
types of financial institutions than the ones identified in the
table (such as insurance companies and mutual funds), and some
filers where the type of financial institution was undetermined at
the time of the tabulation.
Table 1--2019 Filers, by Range of the Number of Reports Filed (Tranches), and Type of Financial Institution
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Casino card club Depository institution Money services Other Securities/futures
Total Total ------------------------------------------------ business (MSB) -----------------------------------------------
Tranche filers reports ------------------------
Filers Reports Filers Reports Filers Reports Filers Reports Filers Reports
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
01_LARGEST_FILERS............................... 19 7,971,675 .......... .......... 19 7,971,675
02_100-2000/WEEK................................ 287 4,434,506 73 946 507 206 3,393,315 5 33,515 3 61,169
03_50-99/WEEK................................... 262 925,809 56 198,827 188 656,924 17 67,414 1 2,644
04_10-49/WEEK................................... 1,562 1,723,657 159 195,821 1,224 1,336,193 167 176,148 12 15,495
05_5-9/WEEK..................................... 1,296 487,224 87 33,547 1,029 387,095 172 63,774 8 2,898
06_121-259/YEAR................................. 1,632 292,595 77 13,943 1,281 229,059 263 47,459 9 1,749 2 385
07_73-120/YEAR.................................. 1,102 104,671 53 5,141 821 78,048 206 19,443 22 2,039
08_37-72/YEAR................................... 1,531 80,568 66 3,406 1,152 60,985 278 14,432 35 1,745
09_25-36/YEAR................................... 808 24,433 28 835 588 17,838 170 5,103 21 627 1 30
10_13-24/YEAR................................... 1,323 23,596 41 722 917 16,355 310 5,556 54 946 1 17
11_7-12/YEAR.................................... 1,089 10,122 39 369 656 6,138 323 2,975 71 640
12_1-6/YEAR..................................... 3,365 8,326 106 273 1,519 4,098 1,188 2,784 547 1,158 5 13
-----------------------------------------------------------------------------------------------------------------------------------------------
Grand Total................................. 14,276 16,087,182 785 1,399,301 9,600 14,157,723 3,099 438,603 783 9,110 9 445
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Table 1 illustrates that in 2019, 19 filers (all of them depository
institutions) filed almost half of the 2019 CTR submissions (7,971,675
reports). These large filers submitted in excess of 2,000 reports per
week.\7\ Adding these numbers to the submissions of filers that filed
between 100 and 2,000 reports per week, totals 306 individual filers
(or slightly over 2% of the filing population), accounting for over
three-quarters of the 2019 CTR submissions (12,406,181 reports).\8\
Furthermore, depository institutions represent two-thirds of the filing
population, and filed 88% of the 2019 CTR submissions. The high
concentration of filings in a very small fraction of the filing
population, and the preponderance of depository institutions at any
tranche level will impact the averages of both burden and cost.\9\
---------------------------------------------------------------------------
\7\ The annual range of the number of reports filed by each
large filer is between 110,000 and nearly 2,000,000 reports per
year.
\8\ The 19 largest CTR filers plus 287 filers reporting between
100 and 2,000 CTRs per week, totals 306 filers. 7,971,675 CTRs
reported by the 19 largest filers plus 4,434,506 CTRs reported by
filers reporting between 100 and 2,000 CTRs per week, totals
12,406,181 reports.
\9\ As large filers that are depository institutions account for
a very large percentage of the 2019 CTR submissions, the general
averages of burden and cost for the filer population will be greatly
affected by the characteristics of the filings of depository
institutions belonging to the first two tranches.
---------------------------------------------------------------------------
All filers submit their reports electronically, either in batch or
discrete form.\10\ Table 2 below sets out the distribution of the 2019
CTR submissions by tranche, filing method, and type of financial
institution.
---------------------------------------------------------------------------
\10\ In batch-filing, a filer submits a single electronic file
containing several reports. In discrete-filing, the filer fills in
an electronic form individually, using a data entry screen that
FinCEN provides. While exceptions apply, batch-filing is generally
used by large-volume filers that have automated the filing process,
while discrete-filing is generally employed by filers that submit
fewer forms per year and rely more on manual data entry methods.
Table 2--Break-down of 2018 CTR Submissions, by Tranche, Filing Method, and Type of Financial Institution
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Reports Casino card club Depository Money services Other Securities/futures
--------------------------------------------------------- institution business (MSB) -------------------------------------------
Tranche ---------------------------------------------
Batch Discrete Total Batch Discrete Batch Discrete Batch Discrete Batch Discrete Batch Discrete
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
01_LARGEST_FILERS............................. 7,937,017 34,658 7,971,675 ......... 19 7,937,017 34,658
02_100-2000/WEEK.............................. 4,304,983 129,523 443,4506 924,763 21,744 3,318,491 7,4824 12,621 20,894 49,108 12,061
03_50-99/WEEK................................. 835,918 89,891 925,809 170,474 28,353 627,595 29,329 37,849 29,565 ......... 2644
04_10-49/WEEK................................. 1,261,192 462,465 1,723,657 133,909 61,912 1,101,645 234,548 24,353 151,795 1,285 14210
05_5-9/WEEK................................... 265,191 222,033 487,224 16,806 16,651 243,531 143,564 4,854 58,920 ......... 2898
06_121-259/YEAR............................... 111,215 181,380 292,595 5,175 8,768 102,810 126,249 2,971 44,488 ......... 2,039 385
07_73-120/YEAR................................ 29,528 75,143 104,671 1,244 3,897 26,875 51,173 1,409 18,034 ......... 2,039
08_37-72/YEAR................................. 16,042 64,526 80,568 757 2,649 14,430 46,555 855 13,577 ......... 1,745
09_25-36/YEAR................................. 3,289 21,144 24,433 188 647 2,836 15,002 265 4,838 ......... 627 ......... 30
10_13-24/YEAR................................. 2,993 21,303 23,596 67 655 1,942 14,413 263 5,293 21 925 17
11_7-12/YEAR.................................. 688 9,434 10,122 49 320 503 5,635 136 2,839 640
12_1-6/YEAR................................... 347 7,979 8,326 34 239 146 3,952 158 2,626 9 1,149 13
-------------------------------------------------------------------------------------------------------------------------------------------------
Grand Total............................... 14,767,703 1,319,479 16,087,182 1,253,466 145,835 13,377,821 779,902 85,734 352,869 50,423 40,687 259 186
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 29024]]
Table 2 shows that, in the aggregate, there is a marked
predilection for batch filing among the filing population (92% of the
2019 CTR submissions were batch-filed). However, filers belonging to
any tranche combine batch and discrete filing, with the preference
shifting from batch filing to discrete filing as the number of reports
filed per year goes down. The aggregate percentages also are influenced
by the concentration of submissions in the first two tranches, and in
the preponderance of depository institutions in the filing population.
When focusing on individual types of financial institution, the
percentage of batch filings vary significantly (money services
businesses (MSBs), for example, file only 20% of their reports in batch
form).
The CTR requires the identification of persons (i.e., entities or
individuals) that fulfill certain roles in the transaction or group of
transactions reflected in each report, either as principals (e.g., a
person that conducts a transaction on its own behalf, or a person on
whose behalf a transaction is conducted), or non-principals (e.g., a
person that conducts a transaction on behalf of another person, or any
currency transporters not hired by the filer itself). The number of
persons per CTR varies significantly among the 2019 CTR submissions.
Breakdowns of those transactions, however, are available where a person
operated on its own behalf, or where the person operating on behalf of
another did not need to be identified (e.g., transactions conducted
through ATMs, night deposit windows, or transported by currency
transporters hired by the filer). Table 3 below sets out the
breakdowns.
Table 3--Breakdown by Tranche and Type of Person Identified in the CTR
[Number of reports]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Conducted on own behalf Information on transactor not
------------------------------------- required
Tranche ------------------------------------- Total
Depository Non- Total Non-
depository Depository depository Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
01_LARGEST_FILE.................................................... 2,289,162 ........... 2,289,162 2,279,428 ........... 2,279,428 4,568,590
02_100-2000/WEEK................................................... 825,683 961,259 1,786,942 660,123 69,132 729,255 2,447,065
03_50-99/WEEK...................................................... 183,055 227,272 410,327 109,655 5,273 114,928 519,982
04_10-49/WEEK...................................................... 510,531 277,878 788,409 239,409 23,918 263,327 1,027,818
05_5-9/WEEK........................................................ 189,273 68,176 257,449 68,963 4,591 73,554 326,412
06_121-259/YEAR.................................................... 128,231 43,146 171,377 41,436 5,734 47,170 212,813
07_73-120/YEAR..................................................... 49,264 18,927 68,191 14,223 2,006 16,229 82,414
08_37-72/YEAR...................................................... 42,521 15,155 57,676 10,321 1,583 11,904 67,997
09_25-36/YEAR...................................................... 13,242 5,637 18,879 2,545 268 2,813 21,424
010_13-24/YEAR..................................................... 12,913 5,895 18,808 2,209 326 2,535 21,017
011_7-12/YEAR...................................................... 5,073 3,398 8,471 625 284 909 9,096
012_1-6/YEAR....................................................... 3,535 3,456 6,991 379 403 782 7,370
------------------------------------------------------------------------------------
Grand Total.................................................... 4,252,483 1,630,199 5,882,682 3,429,316 113,518 3,542,834 9,311,998
--------------------------------------------------------------------------------------------------------------------------------------------------------
In general, depository institutions will only accept reportable
transactions in currency from established customers subject to the
institution's customer identification program (CIP).\11\ Therefore, if
a depository institution's CTR identifies only one type of person,
typically that person is either an established customer operating on
its own behalf, or the person on whose behalf the transaction is
conducted is an established customer and the transaction is conducted
through a transactor that does not need to be identified. In these
cases, a depository institution's CIP records for established customers
would provide the identifying information needed to complete a CTR. In
addition, as a prudential matter and prior to completing a transaction,
depository institutions, for example, request identification documents
such as a driver's license to verify the identity of the customer to
protect against fraud. Table 3 shows that depository institutions filed
7,681,799 reports (or 54% of their 2019 CTR submissions) where the only
person identified in the report was the person subject to the filer's
CIP requirements.
---------------------------------------------------------------------------
\11\ For a description of the customer identification program
requirements, see 31 CFR 1001.220 and Subpart B of 31 CFR Chapter X.
---------------------------------------------------------------------------
Part 2. Re-Calculation of the Traditional Annual PRA Burden and Cost
Traditional Annual PRA Burden (Expressed in Hours)
To comply with their BSA currency transaction reporting
requirement, filers must implement, operate, and supervise a process
that may be broken down into the following steps:
Step 1: Determine whether the filer must report a currency
transaction or group of transactions, based on the amount of a
transaction, the aggregation of multiple transactions at the end of the
day, and certain characteristics of the established customer, the
transaction, or the transactor (such as whether a depository
institution filer has exempted an account of an established customer
from CTR filing). All these determinations are based on objective
parameters.
Step 2: Obtain the information required by the CTR on
parties to the transaction that the filer has not already identified as
part of (i) its normal business operations, (ii) another BSA
requirement (such as CIP), or (iii) another regulatory requirement that
is not BSA-related. Some types of financial institutions filing CTRs
(e.g., depository institutions) will already maintain most, if not all,
the information on parties to the transaction in their customer
database and accounting records.
Step 3: Complete the CTR with the information on the
transaction and the parties involved. The completion of the report will
vary, depending on the technology available to the filer, from a fully-
automated process requiring no manual data entry, to a process that is
nearly entirely manual.
Step 4: The filer will submit the report electronically,
either as a batch or discrete filing. The method of submission does not
necessarily indicate the level of automation of a financial
institution's CTR filing process. For example, some filers that submit
few reports a year batch file, while other filers that submit more
reports may use discrete filing because they have incorporated into
their CTR
[[Page 29025]]
filing process software tools that fill in each form automatically and
release it after manual review of the content.
Step 5: After filing, the filer must store the report for
the regulatory recordkeeping period. As the submission consists of an
electronic file containing one or several reports, the recordkeeping
will be done electronically too.
The greater the reliance on automation, the greater the periodic
cost involved in maintaining, updating, and upgrading the systems and
tools that either link the filer's different applications to obtain the
required source data, or that are used for the CTR completion,
submission, and storage steps.
FinCEN's estimate of the traditional annual hourly burden of the
CTR reporting and recordkeeping requirements only takes into
consideration the time required to complete, submit, and store the
report (Steps 3 to 5 in the process described above).
FinCEN has maintained the same method to calculate the CTR PRA
burden hour estimate since 2002, when paper reports typically were
filled in manually, mailed to the Internal Revenue Service, and
uploaded individually. Under this method, the burden estimates per CTR
were 20 minutes for reporting, and 20 minutes for recordkeeping per
report, regardless of the type of financial institution or complexity
of the report. Since 2011, CTRs have been filed electronically, either
in batch or discrete format. FinCEN has concluded that (a) as either
filing method allows the filer to save an electronic copy of the
batched or discrete/individual reports, which satisfies the
recordkeeping part of the requirement, the recordkeeping portion of the
traditional annual PRA burden will be zero, and (b) the reporting
portion of the traditional annual PRA burden will be set at a variable
number of minutes per report that will reflect the (i) type of
financial institution, (ii) range of the number of reports filed per
year, and (iii) filing method.
For purposes of calculating PRA burden and cost, FinCEN used the
2019 CTR submissions as a baseline, stipulating that submissions from
2019 are an appropriate representation of the expected composition of
the filing population and report submissions for the next three years.
FinCEN estimates the time required for reporting a CTR, based on these
parameters, as described in Table 4 below:
Table 4--Traditional Annual PRA Burden Calculations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reports Minutes per report Total hours
---------------------------------------------------------------------------------------------------- Grand
Tranche Batch-filed Discrete-filed Batch Discrete total
---------------------------------------------------------------------------- Batch Discrete (hours)
D ND D ND D ND D ND
--------------------------------------------------------------------------------------------------------------------------------------------------------
01_LARGEST_FILERS........................ 7,937,017 0 34,658 0 1 1 20 20 132,284 11,553 143,836
02_100-2000/WEEK......................... 3,318,491 986,492 74,824 54,699 1 1 20 20 71,750 43,174 114,924
All other tranches....................... 2,122,313 403,390 670,420 484,878 20 20 20 20 841,901 385,099 1,227,000
--------------------------------------------------------------------------------------------------------------
Total................................ 13,377,821 1,389,882 779,902 539,577 ..... ..... ..... ..... 1,045,934 439,826 1,485,761
--------------------------------------------------------------------------------------------------------------------------------------------------------
D: Depository Institution.
ND: Non-depository Institution.
The traditional annual PRA burden estimated by this new method
(1,485,761 hours) is significantly lower than what FinCEN had
calculated in the past. Table 4 reflects the following rationale for
purposes of the new estimate:
FinCEN considers the reporting time required by both
depository and non-depository financial institutions belonging to the
same tranche of filers (based on number of reports filed), to be the
same.\12\
---------------------------------------------------------------------------
\12\ However, whether the institution is depository or non-
depository will have an effect when combining the traditional annual
PRA burden with the supplemental PRA, as described in Part 3 below.
---------------------------------------------------------------------------
FinCEN stipulates that filers submitting 100 reports per
week or more, are doing so in a totally automated way (``fully-
automated filers'').
If a fully-automated filer submits reports through batch
filing, the individual reports and the batch file that contains them
are produced automatically, without manual intervention. The burden of
1 minute per report represents the administrative burden involved in
carrying out, reviewing, and overseeing the process of filing CTRs, and
not just the time of preparation and submission per report which would
be nearly instantaneous, and therefore far lower than 1 minute per
individual report.
Where the filing does not involve a fully-automated filer
submitting reports through batch filing, FinCEN allocates 20 minutes
per report to reports filed on (a) a discrete basis by fully-automated
filers, or (b) either a batch or discrete basis by any filer submitting
fewer than 100 reports per week. The 20 minutes includes the
administrative burden and the actual time required to enter the
individual report in FinCEN's data entry screen, or to complete the
individual report manually before it is added to the batch file. This
allocation of time is extremely conservative: FinCEN is stipulating
that filers submitting fewer than 100 reports per week are not
automated and that, regardless of the filing method, each report will
require full manual data entry intervention. Similarly, FinCEN
stipulates that fully-automated filers that file discretely will not
receive the benefits of any automation, and will incur the same burden
per report.
FinCEN intends to conduct more granular studies of the filing
population in the future, to arrive at more accurate estimates that
take into consideration a more granular breakdown of the degree of
automation among CTR filers. The data obtained in these studies may
result in significant variations of the estimated annual PRA burden
hours.
Cost of the Traditional Annual PRA Burden
To estimate the cost of each hour of the traditional annual PRA
burden, FinCEN identified three types of roles and corresponding staff
positions involved in the reporting and recordkeeping of CTRs: (1)
Remote supervision (general process oversight), (ii) direct supervision
(review of the filing process, and cross-check of filings against
accounting records), and (iii) operations (actual production, filing,
and storage of the reports). FinCEN calculated the fully loaded hourly
wage for each of these three roles by taking the median wage for these
positions as estimated by the U.S. Bureau of Labor Statistics (BLS),
and computing an additional cost of benefits as follows: \13\
---------------------------------------------------------------------------
\13\ See 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 U.S.
Bureau of Labor Statistics corresponds to May 2019. For 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,
credit intermediation and related activities is $15.80 (hourly
benefits)/$31.45 (hourly wages) = 0.502. The benefit factor is 1
plus the benefit/wages ratio, or 1.502. Multiplying each hourly wage
by the benefit factor produces the fully-loaded hourly wage per
position.
[[Page 29026]]
Table 5--Total Hourly Remuneration (Fully-Loaded Hourly Wage) per Role and BLS Job Position
----------------------------------------------------------------------------------------------------------------
Median hourly Fully-loaded
Role BLS-Code BLS-Name wage Benefit factor hourly wage
----------------------------------------------------------------------------------------------------------------
Remote Supervision............ 11-3031 Financial $62.45 1.502 $93.80
Manager.
Direct Supervision............ 13-1041 Compliance 33.20 1.502 49.87
Officer.
Operations.................... 43-3071 Teller.......... 15.02 1.502 22.56
----------------------------------------------------------------------------------------------------------------
FinCEN estimates that, on average, each role would spend different
amounts of time on the CTR reporting and recordkeeping requirements.
FinCEN further estimates that the total number of hours of the
traditional annual PRA burden may be allocated to the different roles
as follows: 1% of the burden will represent the work of remote
supervision, 9% of the burden will represent the work of direct
supervision, and the remainder will represent operations work.
Multiplying the fully-loaded hourly wage from Table 5 by the proportion
of time FinCEN estimates each role spends on the CTR process, FinCEN
arrives at a weighted average hourly cost, set out below:
Table 6--Weighted Average Hourly Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Remote Supervision Direct supervision Operations Weighted
Component ------------------------------------------------------------------------------ average
% time Hourly cost % time Hourly cost % time Hourly cost hourly cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Recordkeeping and reporting.................................. 1 $93.80 9 $49.87 90 $22.56 $25.73
--------------------------------------------------------------------------------------------------------------------------------------------------------
FinCEN multiplied the total hours per filer type from Table 4
(1,485,761 hours), by the weighted average hourly cost from Table 6
($25.73 per hour), and estimated the cost of the traditional annual PRA
burden to be $38,228,631.
Part 3. Estimate of the Supplemental Annual PRA Burden
FinCEN intends to add a supplemental PRA burden calculation,
reflecting the annual PRA burden and cost involved in (a) obtaining
data required by the CTR that the filer does not need for its own
bookkeeping, and (b) maintaining, updating, and upgrading the
technological infrastructure required to file and store the CTRs.
Annual Hourly PRA Burden of Obtaining Source Data
For purposes of estimating the annual burden of obtaining and
verifying information on the parties to a reportable transaction or
group of transactions (the ``ID-related annual PRA burden''), FinCEN
consolidates the types of financial institution filing CTRs into two
major groups, depository and non-depository institutions, and
stipulates the following:
1. Depository institutions report CTRs where the principal--the
person on whose behalf the transaction is conducted (either when the
person is operating by itself or through a different person)--is an
established customer subject to CIP.\14\ All depository institutions
verify and record the customer identification information on the
principals required by the CTR. Therefore, FinCEN assigns no PRA burden
to obtaining, verifying, and recording the information on principals of
currency transactions reported by depository institutions (``ID-related
PRA burden'').\15\
---------------------------------------------------------------------------
\14\ For the regulatory definition of `established customer',
see 31 CFR 1010.100(p).
\15\ This stipulation is grounded in FinCEN's review of the 2019
CTR submissions. In CTRs filed by depository institutions, the filer
reported a transactional account belonging to either the person
conducting the transaction on its own behalf, or to the person on
whose behalf the transaction was conducted, in over 98% and 94% of
the cases, respectively, while the remaining reports had incomplete
information in the respective sections.
---------------------------------------------------------------------------
2. Non-depository institutions may or may not restrict their
reportable currency transactions to established customers.
Conservatively, FinCEN assigns an ID-related PRA burden of three
minutes per person for a non-depository institution to obtain, verify,
and record the required information to file a CTR on any principal
(either a person conducting a currency transaction on its own behalf,
or a person on whose behalf the transaction was conducted).
3. Neither depository nor non-depository institutions likely
maintain in their records the information required by a CTR about a
person conducting a transaction on behalf of another person. Therefore,
FinCEN assigns an ID-related PRA burden of three minutes per person for
an institution to collect the required information to file a CTR on a
person conducting a transaction on behalf of another person.
4. The CTR requires the reporting of currency transporters
operating on behalf of any party that is not the filer.\16\ The
information required involves the legal person (for example, the
armored car service company), and not the individual natural person
performing the physical transportation. There are a limited number of
currency transporters conducting transactions with depository or non-
depository institutions whose information must be on file for physical
security reasons (such as controlling access to the vault). Therefore,
FinCEN assigns an ID-related PRA burden of one minute per currency
transporter for an institution to collect the required information to
file a CTR on the currency transporter.
---------------------------------------------------------------------------
\16\ See FIN-2013-R001, ``Treatment of Armored Car Service
Transactions Conducted on Behalf of Financial Institution Customers
or Third Parties for Currency Transaction Report Purposes'', July
12, 2013.
---------------------------------------------------------------------------
To arrive at the estimate of the total ID-related annual PRA
burden, FinCEN counted the number of each of the four types of persons
(i.e., a person operating on its own behalf, a person on whose behalf
the transaction is conducted, a person conducting the transaction on
[[Page 29027]]
behalf of another, and a currency transporter operating on behalf of a
person other than the filer) in each 2019 CTR submission, and
multiplied the total of each type of person identified in each report
by the corresponding individual ID-related PRA burden, as defined
above. The breakdown of the total ID-related PRA annual burden is
described in Table 7 below.\17\
---------------------------------------------------------------------------
\17\ The column ``Principals'' includes the PRA burden of
``persons conducting a transaction on their own behalf'', and
``persons on whose behalf the transaction was conducted'' by
somebody else. The column ``Non_Principals'' includes the PRA burden
of ``persons conducting a transaction on behalf of others'' and
``currency transporters working for a person other than the filer.''
Principals carry a zero PRA burden for depository institutions, and
a 3-minute PRA burden per individual person identified in each
report for non-depository institutions. In the case of Non-
Principals, ``persons conducting a transaction on behalf of others''
carry a 3-minute PRA burden per person identified in each report,
regardless of the filer type, and ``currency transporters working
for a person other than the filer'' carry a PRA burden of one minute
per individual currency transporter identified in each report,
regardless of the filer type.
Table 7--Total Annual PRA Burden of Obtaining and Verifying Personal Information
[Minutes and hours]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Depository Non-depository
TRANCHE ---------------------------------------------------------------- Total minutes Total hours
Principals Non-principals Principals Non-principals
--------------------------------------------------------------------------------------------------------------------------------------------------------
01_LARGEST_FILERS....................................... 0 12,905,258 0 0 12,905,258 215,087
02_100-2000/WEEK........................................ 0 6,973,483 3,179,679 60,264 10,213,426 170,224
All other tranches...................................... 0 4,928,268 2,846,334 640,998 8,415,600 140,260
-----------------------------------------------------------------------------------------------
Total............................................... 0 24,807,009 6,026,013 701,262 31,534,284 525,571
--------------------------------------------------------------------------------------------------------------------------------------------------------
The total ID-related annual PRA burden estimated by this method is
525,571 hours.
Cost of Annual PRA Burden of Obtaining Source Data
FinCEN multiplied the total hours per filer type from Table 7
(525,571 hours), by the weighted average hourly cost from Table 6
($25.73),\18\ and estimated the cost of the total ID-related PRA annual
burden to be $13,522,942.
---------------------------------------------------------------------------
\18\ FinCEN stipulates that the weights used to calculate the
weighted average costs in Table 6 are appropriate weights for the
calculation of the weighted average costs for the obtaining of
source data.
---------------------------------------------------------------------------
Annual PRA Cost and Burden of Maintaining and Upgrading Hardware and
Software
It is difficult for FinCEN to separately estimate the annual cost
and hourly burden a financial institution bears in maintaining the
hardware and software for the CTR requirement itself (the ``technology-
related annual PRA cost'' and the ``technology-related annual PRA
burden'' of the CTR, respectively). FinCEN understands that most large
financial institutions maintain highly integrated software and hardware
systems for anti-money laundering and safety and soundness purposes
that leverage the existing need to maintain records and information
about customers and transactions for business reasons. Given the
difficulties of calculating such a cost estimate, FinCEN attempted to
estimate a percentage of the supplemental burden for this report using
data collected in a previous rulemaking effort. While not exact, this
is the best information FinCEN currently has to prepare an estimate
which likely represents the outer limit of the technology-related costs
relative to the total cost.
In 2008, FinCEN surveyed certain depository institutions and money
transmitters to assess the costs to set up and maintain the reporting
of cross-border electronic transmittal of funds (CBETF) data above
certain thresholds (the ``2008 Survey'').\19\ Seventy-five depository
institutions and six money transmitters involved in international
transmittals of funds responded to the survey. In the case of
depository institutions, the survey identified proportionally each type
of cost involved in setting up the reporting process, and the ongoing
cost involved in complying annually with the proposed CBETF reporting
obligation.\20\
---------------------------------------------------------------------------
\19\ FinCEN's 2008 Cross-Border Electronic Funds Transfer Survey
Final Report is set out in Appendix C of FinCEN's January 2009 study
on the Implications and Benefits of Cross-Border Funds Transmittal
Reporting, available at https://www.fincen.gov/sites/default/files/shared/ImplicationsAndBenefitsOfCBFTR.pdf (``January 2009 Study'').
\20\ Appendix C of the January 2009 Study, page 15.
---------------------------------------------------------------------------
The breakdown of the annual ongoing reporting compliance costs is
reflected in Table 8 below.
Table 8--Proportion of Components of Annual PRA Burden
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
PERSONNEL................................................ 45% 85.00%
ONGOING MANAGEMENT....................................... 23.00%
OTHER.................................................... 12.00% COST COMPONENTS INCLUDED IN
TRADITIONAL
TESTING.................................................. 2.00% AND ID-RELATED ANNUAL PRA
BURDEN
TRAINING................................................. 2.00%
CONSULTING............................................... 1.00%
----------------------------------------------------------------------------------------------------------------
HARDWARE................................................. 6.00% COST COMPONENTS NOT INCLUDED IN
IT....................................................... 6.00% 15.00% TRADITIONAL AND ID-RELATED
ANNUAL PRA
SOFTWARE DEVELOPMENT..................................... 3.00% BURDEN
----------------------------------------------------------------------------------------------------------------
TOTAL................................................ 100.00% 100.00%
----------------------------------------------------------------------------------------------------------------
The absolute ongoing cost per component estimated by the 2008
Survey respondents relate to the CBETF reporting, and therefore cannot
be used to extrapolate the costs of another reporting or recordkeeping
requirement.
[[Page 29028]]
While the absolute costs may not be extrapolated to another
requirement, the proportion of the annual ongoing compliance costs
provided by the depository institution respondents to the 2008 Survey
can be used to extrapolate an estimate of the technology-related PRA
cost (15% of the total cost) for fully-automated filers. FinCEN
assesses such a method is valid because the CTR and CBETF reporting and
recordkeeping requirements are similar with respect to the objective
nature of the reporting triggered by threshold amounts of transactions.
Given the limited information at its disposal regarding the technology-
related costs associated with the filing of CTRs, FinCEN is using the
proportions of the cost components reported by depository institutions
to extrapolate the total annual technology-related PRA cost, as CTRs
filed by depository institutions represent 88% of all CTRs filed in
2019. In addition, FinCEN believes the proportionality of ongoing costs
derived from the 2008 Survey is still useful today notwithstanding
changes in costs over time. Not only has the cost of hardware dropped
considerably between 2008 and 2019, but the personnel cost associated
with software development and information technology management has
increased on par with, or slightly less than, the cost of personnel
included in the traditional PRA estimate; in other words, the changes
in costs of the different components of the information technology
investment have grown at a slower pace than the traditional annual PRA
cost estimate.\21\
---------------------------------------------------------------------------
\21\ See footnote 8. See also, Bureau of Labor Statistics,
Occupational Employment Statistics-National, May 2008, available at
https://www.bls.gov/oes/tables.htm. Between 2008 and 2019, for
example, the median hourly wage for financial managers, compliance
officers, and tellers went up 17.41%, 28.43%, and 28.82%,
respectively, while the same metric went up only 8.27% and 20.03%
for software developers and programmers and network and computer
system administrators, respectively.
---------------------------------------------------------------------------
Based on the revised estimate of the traditional annual PRA burden
(as described in Part 2 above), and the estimate of the additional ID-
related annual PRA burden described in the earlier sections of this
Part, the PRA burden and cost for all filers (without including a
technology component) are described in Table 9 and Table 10 below,
respectively.
[GRAPHIC] [TIFF OMITTED] TN14MY20.030
Based on the proportions described in Table 8 above, the
traditional and ID-related annual PRA costs of fully-automated filers
estimated in Table 10 (the ``Table 10 PRA cost'') constitute 85% of the
total annual PRA cost of reporting and recordkeeping incurred by such
filers, with the remaining 15% of costs corresponding to the
technology-related PRA cost (i.e., maintenance, updates and upgrades of
software, general information technology support, and hardware
replacement). To estimate the total annual PRA costs for fully-
automated filers to file CTRs (a calculation that adds the cost of the
traditional and ID-related annual PRA burden to the newly estimated
technology-related PRA cost), FinCEN discounts the Table 10 PRA cost by
its contribution to the total annual PRA cost ($16,571,966/0.85),
resulting in a total annual PRA cost for fully-automated filers of
$19,496,430.
Determining the hourly burden of some cost components of the
technology-related annual PRA burden, such as the price of new
hardware, is not straightforward. The method FinCEN followed to
estimate the technology-related annual PRA cost does not provide a
definitive way for deriving the burden hours attributable to each cost
component. To produce such an estimate, FinCEN would have needed
information not provided in the 2008 Survey (such as the participation
of different levels of technology-related labor and their fully-loaded
compensation rates). FinCEN, however, believes that it is appropriate
to estimate the total annual PRA hourly burden for fully-automated
filers using a calculation similar to the one employed for the total
annual PRA cost. FinCEN stipulates that the traditional and ID-related
PRA burden for fully-automated filers set out in Table 9 above (the
``Table 9 PRA burden'') also constitutes 85% of the total annual PRA
burden of such filers. FinCEN discounts the Table 9 PRA burden by its
contribution to the total annual PRA burden (644,072 hours/0.85), and
arrives at a total annual
[[Page 29029]]
PRA burden for fully-automated filers of 757,732 hours.\22\ This equals
the sum of the traditional annual PRA burden and the ID-related annual
PRA burden (644,072 hours or 38,644,260 minutes), and the technology-
related annual PRA burden (113,660 hours or 6,819,583 minutes).
---------------------------------------------------------------------------
\22\ This calculation uses the cost per burden hour estimate of
$25.73 per hour derived through the previous estimates even though
the costs per hour in the context of maintaining, updating, and
upgrading the hardware and software are different. Of importance
here is FinCEN's confidence in the overall costs reflected in this
assessment, even if there is less confidence in the notional number
of burden hours associated with the supplemental cost.
---------------------------------------------------------------------------
In the future, FinCEN intends to conduct studies of the filing
population to more accurately estimate the contribution of technology-
related costs to the total annual PRA burden. These future studies will
incorporate a more granular breakdown of the degree of automation among
CTR filers, and may result in significant variations of the estimated
annual PRA burden. Among other things, FinCEN will need to segregate
the technology costs associated exclusively with BSA reporting,
recordkeeping, and monitoring requirements, from the technology costs
involved in (i) complying with other regulatory frameworks, and/or (ii)
processing data used for the filer's other business purposes.
Estimated Reporting and Recordkeeping Burden: The average estimated
PRA burden, measured in minutes per report, is 8 minutes, as described
in Table 11 below:
[GRAPHIC] [TIFF OMITTED] TN14MY20.031
Estimated Number of Respondents: 14,276 financial institutions.\23\
---------------------------------------------------------------------------
\23\ See Part 1-Table 1 for a breakdown of the types of
financial institutions that filed CTRs in 2019. Note that all banks,
casinos and card clubs, MSBs, brokers or dealers in securities,
mutual funds, futures commissions merchants and introducing brokers
in commodities are required to comply with the CTR regulatory
requirement, however, not all financial institutions conduct
transactions that would trigger the CTR filing requirements. See 31
CFR 1020.310 (banks), 31 CFR 1021.310 (casinos and card clubs), 31
CFR 1022.310 (MSBs), 31 CFR 1023.310 (brokers or dealers in
securities), 31 CFR 1024.310 (mutual funds), and 31 CFR 1026.310
(futures commissions merchants and introducing brokers in
commodities).
---------------------------------------------------------------------------
Estimated Total Annual Responses: 16,087,182.\24\
---------------------------------------------------------------------------
\24\ Numbers are based on actual 2019 filings as reported by the
BSA E-Filing System as of 12/31/2019. This number reflects the total
number of filings for both the legacy CTR and CTRC and the new
FinCEN Report 112--CTR.
---------------------------------------------------------------------------
Estimated Total Annual Reporting and Recordkeeping Burden: The
estimated total annual PRA burden is 2,124,992 hours, as described in
Table 12 below.
[GRAPHIC] [TIFF OMITTED] TN14MY20.032
Estimated Total Annual Reporting and Recordkeeping Cost: At the
weighted average hourly cost of $25.73 described in Table 6 above, the
cost of the estimated total annual PRA reflected in Table 12 (2,124,992
hours) is $54,676,044.
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.
Request for Comments
a. Specific Requests 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 the
calculation of the total PRA burden of filing the CTR, under the
current regulatory requirements. Specifically, comments are invited on
the following issues:
1. FinCEN has broken down the process required to comply with the
CTR requirement into several steps, from identifying a transaction that
must be reported, to maintaining and upgrading software required for
the completion, submission, and storage of the report. In general, do
these steps reflect the filer's own general experience? Is there a need
to include a more granular breakdown of the process to describe what,
on average, a CTR filer must do?
2. For purposes of calculating PRA burden and cost, FinCEN has
taken the 2019 CTR submissions number as a baseline, stipulating that
it is an
[[Page 29030]]
appropriate representation of the expected composition of the filing
population and report submissions for the next three years. Is that an
appropriate assumption? Are there expected changes in either the
composition of the filing population or the breakdown of the report
submissions over the next three years that should be factored into
FinCEN's estimates?
3. FinCEN estimates that, on average, the time involved in the
reporting of a CTR varies in accordance with the range of the total
number of reports filed per year (i.e., filers filing 100 reports or
more per week are totally automated), the type of financial institution
and type of transaction (i.e., depository financial institutions
engaging in reportable currency transactions that only involve
established customers), and filing method (i.e., completion of reports
filed on a discrete basis generally involve more manual data entry than
those batch-filed, regardless of the filer's level of automation). Are
these assumptions reasonable? Are there other factors that may affect
the amount of time involved in preparing, reviewing, and filing the
report, which FinCEN could quantify by analyzing the contents of the
BSA database and without conducting a formal survey of the reporting
financial institutions?
4. FinCEN estimates that the completion, review, and submission of
a CTR will demand a certain number of minutes per report, depending on
the factors listed above. On average, is the estimated number of
minutes per report reasonable, by degree of automation of the filer,
type of financial institution the filer is, method of filing, types of
financial institution labor positions involved, and allocated time per
labor position?
5. FinCEN estimates that, on average, the cost of labor involved in
the completion, review, and submission of a CTR will depend on at least
three different levels of staff involvement within the filer's
organization (i.e., remote supervision, direct supervision, and
operations) participating in the process for different portions of the
CTR process. On average, is the allocation of time and hourly cost plus
benefits per organizational level reasonable? Has FinCEN identified the
right level of involvement and the right type of labor position per
role?
6. FinCEN estimated the ID-related PRA burden by stipulating that
depository institutions conduct reportable transactions only with
established customers, while non-depository institutions conduct
transactions with non-established customers. Is this stipulation
reasonable? Is there another factor that would allow FinCEN to
determine when a non-depository institution conducts a transaction with
an established customer, and therefore its ID-related PRA cost is lower
than the current estimate? FinCEN allocated an ID-related PRA cost of
three minutes to persons conducting a transaction on behalf of another,
for any type of financial institution. Is this allocation always
required, or are there instances where the filer has already obtained,
verified, and retained the personal data of the transactor, and
therefore the allocation could be lower, or even eliminated altogether?
7. FinCEN estimated the technology-related PRA burden on the
assumption that, on average, the percentage breakdown of the total cost
among different cost factors is mostly constant among analogous
reporting obligations. Based on a previous industry survey, FinCEN
based the estimates of total annual PRA burden on the premise that
traditional and ID-related annual PRA costs amount to 85% of the total
annual PRA cost of fully-automated filers, while software, hardware,
and systems-related costs, including maintenance, updates and upgrades
represent the remaining 15%. Is there existing evidence that may
indicate that one or both of these assumptions are not reasonable? Is
there another factor or combination of factors that would assist FinCEN
in determining which filers that file fewer than 100 reports a week may
also be fully or partially automated, and therefore adjust the
technology-related PRA cost?
8. The estimate of the technology-related PRA burden relies on the
principle that the system maintenance, hardware maintenance and
replacement, and other technological costs included in the estimate
relate to hardware and software resources used exclusively for CTR
filing. If such resources are used for multiple purposes, only a
fraction of their cost that represents their use for complying with
this BSA obligation should be included in the PRA burden estimate. Is
this assumption correct? Is this assumption provable by objective
methods? Has your financial institution determined what percentage of
its technology is used for CTR purposes? How can FinCEN determine which
resources, if any, are used for purposes other than BSA compliance, and
therefore adjust the PRA estimate?
9. Please provide any other comments on calculation methods,
assumptions, stipulations, or any other issues that may impact the
total PRA burden calculation of the regulations or the report.
b. 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: (a) 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; (b) the accuracy of the agency's estimate of
the burden of the collection of information; (c) ways to enhance the
quality, utility, and clarity of the information to be collected; (d)
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 (e) estimates
of capital or start-up costs and costs of operation, maintenance, and
purchase of services to provide information.
Dated: May 8, 2020.
Derek Baldry,
Deputy Chief of Staff, Financial Crimes Enforcement Network.
[FR Doc. 2020-10310 Filed 5-13-20; 8:45 am]
BILLING CODE 4810-02-P