us, and what they cannot. in addition, we plan to publish an article in the federal reserve bulletin discussing and interpreting the data. the article will be published at the same time that the federal financial institutions examination council ( ffiec ) publishes summary tables of the hmda data, in late summer or early fall. an institution that might soon - as early as today - have to disclose its own price data, should already have analyzed its data and be prepared to respond to comments from others interpreting its data. first, an institution should take the steps necessary to reach a high degree of confidence that its data are accurate. after that, an institution may want to determine how its data will appear to the public in the disclosure tables the ffiec will release by the early fall ; the precise formats of those tables were published in december. a lender may also want to determine if the hmda data reflect price disparities that are not adequately explained by other information in the hmda data set - such as income, loan size, and lien status - and, if so, to analyze those disparities in light of price variables known to the lender. the analysis could include a review of pricing discretion provided to loan officers. it also could include, where applicable, a review of the pricing patterns of mortgage brokers through which the lender has originated loans. should a lender discover risks in its hmda data, it goes without saying that the lender should manage those risks. as with other risks, those related to the hmda disclosures should be managed with an eye to the entire enterprise, including the bank and the non - depository affiliates. compliance with the bank secrecy act since the usa patriot act of 2001 significantly amended the bank secrecy act, compliance in this area has been a major concern for the banking industry. in large part, bankers ’ concerns center on the increased burden of complying with the additional requirements, the apparent lack of consistency in oversight and supervision, and law enforcement issues. the federal reserve recognizes that banking organizations have devoted significant resources to helping the government identify and prosecute those who are involved with the funding of terrorist activities, money laundering, and other crimes. but some recent events are affecting bankers ’ perceptions about their role in this critical area, and have raised serious questions about what bank regulators and other government authorities - most notably law enforcement agencies - expect of bankers. today, i want to provide some background information and describe what the federal reserve is doing, in coordination

" defensive " sars in an effort to avoid any criticism of their judgment about whether some activity is illegal or suspicious, and to avoid sanctions for failing to file particular sars. the treasury department ’ s financial crimes enforcement network ( fincen ) has reported that these defensive filings threaten to clutter the sar database with information that cannot be properly analyzed due to the volume. bank regulators and fincen recognize that no process for fraud or money - laundering detection and control can reasonably be expected to perfectly detect every transaction. but, financial institutions are expected to have a sound anti - money - laundering compliance program. this must include well - defined processes to identify suspicious activities, and those processes should be tailored to the risk and complexity of each business line. banks should provide sufficient training to line staff, compliance officers, internal auditors, and legal staff to keep employees on the alert for suspicious activities. further, when questionable activity is detected, the bank must respond promptly and effectively, and work with appropriate law enforcement authorities and bank regulators. i am sure that you are aware by now of the interagency efforts to develop and issue new, enhanced bank secrecy act examination guidelines and procedures within the next few months. the federal reserve and the other federal banking supervisors, with the active participation of fincen, are drafting these more - detailed uniform examination guidelines and procedures. supervisors, on a pilot basis, have been using the new guidelines at financial institutions. once the procedures are completed, we will work hard to educate our examination forces and the industry about the new guidelines and procedures. these efforts are intended to better ensure consistency in the bank secrecy act and anti - money - laundering supervision programs of the bank regulators and fincen - the entity within the u. s. treasury that is statutorily responsible for the implementing the bank secrecy act. in addition, the federal reserve and the other federal bank supervisory agencies recently signed a memorandum of understanding with fincen to share critical information about banking organizations ’ compliance with the bank secrecy act. by providing pertinent bank secrecy act information to fincen, which is adding additional staff to fulfill its responsibilities, the federal reserve and the other regulators can now better coordinate their supervision and enforcement efforts, thus further reducing the potential for unwarranted compliance burdens. fincen is also committed to providing both bankers and regulators information about emerging money - laundering schemes and guidance for continually improving bank secrecy act compliance. the federal reserve is also working with senior justice and treasury officials to ensure they understand the