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Florida bankers contend that they are under attack by overly aggressive federal banking regulators. But a Daily Business Review analysis of public reprimands by federal banking regulators indicates that Florida banks and employees are being disciplined with about the same regularity over the last five years. The analysis comes as the Florida Bankers Association is scheduled to host William J. Fox, director of the Treasury Department’s Financial Crimes Enforcement Network today at the J.W. Marriott on Brickell Avenue in Miami. FinCen is in charge of enforcing the Bank Secrecy Act in 1994. Federal regulators have reprimanded five locally based institutions in nine months for violations of that act. Fox’s visit is the first of at least four meetings in the next three weeks between Florida’s banking community and federal banking regulators. “I think that regulators take action when they deem it appropriate to do so,” Fox told the Review in an earlier interview. “That is where we are when we engage in an enforcement action. We really do it not with a view of geography.” The Federal Deposit Insurance Corp. insists it is not targeting any group of banks or geographic area for a crackdown. “We are not coming down harder on banks than we have in the past,” said FDIC spokesman Frank Gresock in Washington. “Our criteria for the initiation of enforcement actions are unchanged. “We continue to have a good record working and cooperating with banks to correct problems that are noted,” Gresock said. Public records support that position. In 2004, federal regulators issued 23 orders against Florida-based banks and their employees, down from 32 orders in 2003, according to the analysis of an order posted on the Web sites of the Federal Reserve, the FDIC, the Office of the Comptroller of the Currency and the Office of Thrift Supervision. The figure for last year was in line with the number from 2000 through 2002. As a percentage, Florida accounted for about 3.5 percent of the 645 disciplinary actions issued in 2004 by all the agencies. Between 2000 and 2003, Florida accounted for between 3 percent and 4 percent of the disciplinary actions nationwide. Those totals ranged from 579 to 737 orders, according to the analysis. Banks and bankers in heavily populated states and North Carolina, where Bank of America and Wachovia are headquartered, had a greater percentage of reprimands than their peers in Florida. More disciplinary actions were issued in California than any other state, with 11 percent, or 71 enforcement actions, of all reprimands in 2004. Texas was second with 9.6 percent, or 62 actions, and North Carolina third with 9.3 percent, or 60 actions. Rounding out the top five were Illinois and Ohio with 8.1 percent, or 52 actions, and 7 percent, or 45 actions, respectively. New York accounted for 1.9 percent, or 12 enforcement actions in 2004. What has changed the most over the years is the type of violations for which regulators are disciplining banks. In the last year, almost every federal banking reprimand of a Florida bank or banker has been for violations of anti-money laundering laws related to the Bank Secrecy Act and the USA Patriot Act. Congress has made the enforcement of anti-money laundering laws a top priority following Senate hearings last summer examining violations at Riggs Bank in Washington, D.C., and its Miami office on Brickell Avenue. Prior to 2003, most of the actions were generally for mismanagement, conflicts of interest and lax administrative proceedings. Florida bankers privately insist that they are getting the cuff from their supervisors. Local executives would not talk on the record for fear that regulators might treat them more harshly if they publicly complained. “The sense that we get without looking at any hard data to make comparisons across the country is that there is an uneven and unequal enforcement by regulators [in Florida] in the application of the BSA and the Patriot Act compared to places like Omaha,” said Alex Sanchez, chief executive of the Florida Bankers Association. Sanchez said anecdotal evidence suggests that anti-money laundering laws are an issue only in places with sizable international communities. He said that rarely in his travels for industry conferences nationwide does he see bankers protest anti-money laundering laws to the same degree as South Florida bankers. Sanchez said his organization’s members are eager to live up to regulators’ standards but have had a difficult time getting a clear list of requirements. Sanchez said members tell him that many regulators are sending mixed messages about what they want and how rules are to be interpreted. Satisfying regulators can be expensive. Fort Lauderdale’s BankAtlantic Bancorp disclosed Wednesday in its annual report that it spent $5 million in the second half of 2004 to come into compliance with the USA Patriot Act. Staying in compliance this year will cost $2 million to $2.5 million more than originally anticipated, said the holding company for BankAtlantic. Cost may be one reason that bankers are chafing at the regulations, but Sanchez said that when he meets with bankers around the county, he is “not getting the passion from the Kansas bankers that I am getting from the Florida bankers. “That is why we need equal, clear and consistent application of these rules,” he said. “We need more training for the bankers and more training for the regulators. Maybe we need joint training, if not being in the same room at least using the same textbook.” Charles Intriago, publisher of the Money Laundering Alert newsletter and a former federal prosecutor, said Florida banks continue to get a pass from regulators and prosecutors in the enforcement of anti-money laundering laws despite their public protests to the recent wave of reprimands. “They are whistling in the dark,” said Intriago, who anticipates more than 1,000 people will attend his three-day International Money Laundering Alert Conference in March in Hollywood, Calif. “With the sorry record of openly welcoming corruption proceeds, I don’t think South Florida banks have much of a leg to stand on concerning complaints of thorough federal examinations,” Intriago said.

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