Privacy Act of 1974; As Amended; System of Records

DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

Privacy Act of 1974; As Amended; System of Records

AGENCY: Office of Thrift Supervision, Treasury.

ACTION: Amendment to an existing system of records.

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SUMMARY: In accordance with the Privacy Act of 1974 (Privacy Act),

Office of Thrift Supervision (OTS) is publishing an amendment to an

existing system of records. This amendment reflects an ongoing review

of an existing system of records pursuant to Appendix I to OMB Circular

No. A-130--Revised, which has resulted in changes in nearly all

elements of the system of records. In addition, the changes reflect a

new proposed interagency suspicious activity reporting process,

combining the criminal referral and suspicious financial transactions

reporting requirements of the Federal financial regulatory agencies and

Treasury, and involving the use of a new computerized database

maintained by Financial Crimes Enforcement Network (FinCEN) on behalf

of the Federal financial regulatory agencies and Treasury.

[[Page 64242]]

DATES: Comments must be received by January 16, 1996,. If no comments

are received which precipitate changes to the system, the system will

become effective on January 23, 1996.

ADDRESSES: Send comments to: Chief, Dissemination Branch, Records

Management and Information Policy, Office of Thrift Supervision, 1700 G

Street, NW, Washington, DC 20552. These submissions may be hand-

delivered to 1700 G Street, NW, from 9 am to 5 pm on business days;

they may be sent by facsimile transmission to FAX number (202) 906-

7755. Comments will be available for inspection at 1700 G Street, NW,

from 1 pm until 4 pm on business days.

FOR FURTHER INFORMATION CONTACT: Randy Thomas, Special Counsel, General

Law Division, (202) 906-7945.

SUPPLEMENTARY INFORMATION: OTS is amending its existing system of

records entitled Confidential Individual Information System, Treasury/

OTS .001, last published in the Federal Register at 60 FR 13770, (March

14, 1995) for which it has promulgated exemption rules pursuant to

exemptions (j)(2) and (k)(2) of the Privacy Act, 5 U.S.C. 552a(j)(2)

and (k)(2).

Certain of the changes to the system reflect a proposed agreement

between FinCEN, the Federal Reserve Board (FRB), the Office of the

Comptroller of the Currency (OCC), the Federal Deposit Insurance

Corporation (FDIC), the OTS, and the National Credit Union

Administration (NCUA) (the Federal financial regulatory agencies) to

store Suspicious Activity Reports (SAR) in electronic form in a

database maintained by FinCEN and located at the Internal Revenue

Service (IRS) Computing Center in Detroit, Michigan. It is proposed

that the IRS Computing Center, as a contractor to FinCEN and the

Federal financial regulatory agencies, will operate and administer the

computer system that supports the SAR database. Except for a limited

number of authorized personnel from the Criminal Investigation

Division, employees of the IRS will not have access to the SAR

database.

The SAR is being adopted by all Federal financial regulatory

agencies as a replacement for the Criminal Referral Form, which has

been used by depository institutions to report suspected criminal

activity to the Federal financial regulatory agencies and the Federal

law enforcement authorities (see FRB and OCC proposed rules at 60 FR

34481 and 60 FR 34476, respectively, July 3, 1995, and OTS proposed

rules at 60 FR 36366, July 17, 1995), and by Treasury to implement

suspicious financial transaction reporting rules (see Treasury proposed

rulemaking at 60 FR 46556, September 7, 1995).

Information from the Criminal Referral Form is included in the

existing Information System, and similar information will continue to

be collected by the SAR. In addition to reports of suspected criminal

activity, the SAR will also allow a financial institution to report

suspicious financial transactions under Federal money laundering

statutes, pursuant to Treasury regulations (31 CFR part 103). This

information, which may include financial transactions by individuals,

will be included in the existing Information System. Only the

information collected by the SAR, and its status updates, will be

located in the database maintained by FinCEN; all other information in

the Information System is located at the OTS.

Pursuant to the inter-agency agreement between FinCEN and the

Federal financial regulatory agencies, FinCEN will manage a

computerized database containing the SAR, and status updates, which is

information currently collected and/or maintained separately by each of

the Federal financial regulatory agencies. With regard to this

database, only those records generated under the jurisdiction of the

OTS are considered to be OTS records for purposes of the Privacy Act.

Access to and use of these OTS records by other agencies continue to be

governed by the routine uses in the OTS's Information System.

Accordingly, the ``Routine Uses'' element is amended to reflect

the sharing among Federal financial regulatory agencies and law

enforcement agencies of the information collected by the SAR and the

status updates. Other changes consist of the following: Three of the

system's former routine uses (numbers 1, 3, and 6) are being retained

and renumbered as new routine uses 1, 3, and 7. One former routine use

(number 4) is being deleted. Two former routine uses (numbers 2 and 5)

have been revised and renumbered, respectively, as new routine uses 4

and 5. New routine use number 4 clarifies that system records may be

used to make referrals to any appropriate governmental or self-

regulatory entity with authority to administer law, rule, policy, or

license. New routine use number 5 clarifies that system records may be

referred to bar, trade, or professional organizations for possible

disciplinary action.

Additionally, the ``Safeguards'' element is amended to add that

on-line access to the computerized database maintained by FinCEN is

limited to authorized individuals who have been specified by each

participating agency and Treasury, and who have been issued a non-

transferable identifier or password. Other amendments reflect

organizational changes and are not significant. The exemptions for this

system of records continue to be (j)(2) and (k)(2), because the

information consists of investigatory material compiled for law

enforcement purposes.

The altered system of records report, as required by 5 U.S.C.

552a(r) of the Privacy Act, has been submitted to the Committee on

Government Reform and Oversight of the House of Representatives, the

Committee on Governmental Affairs of the Senate, and the Office of

Management and Budget, pursuant to Appendix 1 to OMB Circular A-130,

Federal Agency Responsibilities for Maintaining Records About

Individuals, dated July 15, 1994.

The proposed altered system of records, Treasury/OTS .001,

Confidential Individual Information System, is published in its

entirety below.

DATED: December 5, 1995.

Alex Rodriguez,

Deputy Assistant Secretary (Administration).

Treasury/OTS .001

System name:

Confidential Individual Information System - Treasury/OTS.

System location:

Enforcement Division, Office of Thrift Supervision, 1700 G Street,

NW, Washington, DC 20552. Computerized records of Suspicious Activity

Reports (SAR), with status updates, are managed by FinCEN pursuant to a

contractual agreement, and are stored the Internal Revenue Service's

Computing Center in Detroit, Michigan. Authorized personal at the

Federal financial regulatory agencies have on-line access to the

computerized database managed by FinCEN through individual work

stations that are linked to the database central computer.

Categories of individuals covered by the system:

Directors, officers, employees, agents, borrowers, and persons

participating in the conduct of the affairs of entities regulated by

the OTS who have been involved in suspected criminal activity or

suspicious financial transactions and referred to law enforcement

officials; and other individuals who have been involved in

irregularities, violations of law, or unsafe or unsound practices

[[Page 64243]]

referenced in documents received by OTS in the exercising of its

supervisory functions.

These records also contain information concerning individuals who

have filed notices of intention to acquire control of a savings

association; controlling persons of companies that have applications to

acquire control of a savings association; and organizers of savings

associations who have sought Federal Savings and Loan Insurance

Corporation (FSLIC) or Saving Association Insurance Fund (SAIF)

insurance of accounts or federal charters.

Categories of records in the system:

Application information and inter-agency and intra-agency

correspondence, memoranda and reports. The SAR contains information

identifying the financial institution involved, the suspected person,

the type of suspicious activity involved, the amount of loss known, and

any witnesses.

Authority for maintenance of the system:

12 U.S.C. 1464; 44 U.S.C. 3101.

Purpose(s):

The overall system serves as a central OTS repository for

investigatory or enforcement information related to the responsibility

of OTS to examine and supervise savings associations. It also serves to

store information on applicants to acquire, control, or insure a

savings association in connection with OTS's regulatory

responsibilities.

The system maintained by FinCEN serves as the database for the

cooperative storage, retrieval, analysis, and use of information

relating to Suspicious Activity Reports made to or by the Federal

financial regulatory agencies and FinCEN to various law enforcement

agencies for possible criminal, civil or administrative proceedings

based on known or suspected violations affecting or involving persons,

financial institutions, or other entities under the supervision or

jurisdiction of such Federal financial regulatory agencies.

Routine uses of records maintained in the system, including categories

of users and the purposes of such uses:

Information in these records may be used to: (1) Provide the

Department of Justice with periodic reports on the number, amount,

individual identity and other details concerning outstanding potential

criminal violations of the law that have been referred to the

Department; (2) Provide the Federal financial regulatory agencies and

FinCEN with information relevant to their operations; (3) Provide

information to third parties during the course of an investigation to

the extent necessary to obtain information pertinent to the

investigation; (4) Provide information or records to any appropriate

governmental agency or self-regulatory organization charged with the

responsibility of administering law or investigating or prosecuting

violations of law or charged with enforcing or implementing a statute,

rule, regulation, order, policy, or license; (5) Disclose, when

considered appropriate, information to a bar association, or other

professional organizations performing similar functions, for possible

disciplinary action; (6) Disclose information when appropriate to

international and foreign governmental authorities in accordance with

law and formal or informal international agreements; and (7) Provide

information to any person with whom the OTS contracts to reproduce, by

typing, photocopying or other means, any record within this system for

use by the OTS and its staff in connection with their official duties

or to any person who is utilized by the OTS to perform clerical or

stenographic functions relating to the official business of the OTS.

Policies and practices for storing, retrieving, accessing, retaining,

and disposing of records in the system:

Storage:

Records are maintained on magnetic media and in paper files.

Retrievability:

Computer output and file folders are retrievable by indexes of

data fields, including name of financial institution and individual's

name.

Safeguards:

Paper files are stored in lockable metal file cabinets with access

limited to authorized individuals. Computer disks maintained at OTS are

accessed only by authorized personnel.The database maintained by FinCEN

complies with applicable security requirements of the Department of the

Treasury. On-line access to the information in the database is limited

to authorized individuals, and each individual has been issued a non-

transferable identifier or password.

Retention and disposal:

Records are periodically updated to reflect changes and maintained

as long as needed.

System manager(s) and address:

Deputy Chief Counsel for Enforcement, Office of Thrift

Supervision, 1700 G Street, NW, Washington, DC 20552.

Notification procedure:

The system is exempt from notification and record-access

requirements and requirements that an individual be permitted to

contest its contents under 5 U.S.C. 552a(j)(2) and (k)(2) as relating

to investigatory material compiled for law enforcement purposes.

Record access procedures:

See ``Notification procedure'' above.

Contesting record procedures:

See ``Notification procedure'' above.

Record source categories:

Suspicious activity reports and related historical information and

updating forms compiled by financial institutions, the OTS, and other

Federal financial regulatory agencies for law enforcement purposes. The

OTS will also include information from applicants, inter agency and

intra-agency correspondence, memoranda, and reports.

Exemptions claimed for the system:

This system is exempt from 5 U.S.C. 552a(c)(3), (d)(1), (d)(2),

(d)(3), (d)(4), (e)(1), (e)(4)(G), (H) and (I), and (f) of the Privacy

Act pursuant to 5 U.S.C. 552a (j)(2) and (k)(2).

[FR Doc. 95-30435 Filed 12-13-95; 8:45 am]

BILLING CODE 6720-01-F