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More Changes To The BANK SECRECY ACT!
MULTIPLE CASH TRANSACTIONS AND MAGNETIC FILING PROPOSED
The Department of the Treasury has proposed important changes regarding (1) aggregating of currency transactions; (2) expanding the types of businesses which must file on multiple transactions; and (3) requiring financial institutions that file more than 1,000 CTR's a year to file electronically, by magnetic tape or diskette.
Financial institutions that have software or hardware in place enabling them to monitor multiple cash transactions exceeding $10,000, by or on behalf of the same customer during a business day, are required to report those transactions. But if they didn't have the program already in place, the institution was not required to install one to police their accounts in this manner.
Part of the proposed rule now being considered states that if the size of the institution is over $100 million in assets, it must now install a program to capture and report these multiple cash transactions.
In addition, all currency dealers and exchangers (including check cashers) and transmitters of funds (i.e. American Express, Western Union, etc.), regardless of size, would also be required to put into place aggregation systems and procedures that track and capture currency transaction in excess of $10,000 by or on behalf of any one person during one business day. These systems may be manual or computerized.
Treasury estimates 15,000 financial institutions would be affected by this requirement-1,000 banks and 14,000 nonbank financial institutions.
Another part of the proposal states that if a financial institution files more than 1,000 Currency Transaction Reports a year, they must incorporate the use of magnetic media, such as magnetic tape or diskette. If an institution once reaches 1,000 CTR's, it must start this type of reporting by July of the following year, and must thereafter file magnetically-even if the number of reports drops below 1,000 per year.
At the present time, Treasury says that of the 6.5 million reports filed last year (1989), only 1% were filed magnetically. This new requirement, according to their estimates, would affect only 740 of the 30,000 reporting financial institutions-but those 740 institutions account for 57% of all the reports filed!
Of course, any institution that wishes to file through magnetic tape is encouraged to do so. Treasury estimates this type of filing would reduce reporting time per form to 12 minutes, as opposed to the 24 minutes they say it takes for paper reporting. It would also reduce the length of time from reporting to availability of the information from about 45 days to approximately 18, which would be of benefit to investigative personnel, according to the IRS.
Of course it never pays to second guess any of the regulatory agencies but Treasury has said that, "After consideration of the comments, the 1,000 number may be lowered or increased." Having experienced their inclination to change…even smaller institutions would be wise to investigate electronic reporting and aggregation at this time.
Comment is due back to Treasury on these proposals by December 5, 1990.
Proposed Amendment
PART 103
FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND FOREIGN TRANSACTIONS
1…
2. It is proposed to amend Sec. 103.22 by adding a new paragraph (a)(5) to read as follows:
Section 103.22 Reports of currency transactions.
(a)(5) Each bank with depository assets over $100 million shall have in place systems and procedures that at a minimum, capture multiple currency transactions that are by or on behalf of the same person and result in cash in to or cash-out from an account totaling more than $10,000 on the same business day. In addition, each transmitter of funds, and each currency dealer and exchanger (including a check casher) shall have in place systems and procedures that capture multiple currency transactions that result in cash-in or cash-out totaling more than $10,000 on the same business day by or on behalf of the same person.
3. It is proposed to amend Section 103.27 by adding a new paragraph (a)(5) to read as follows:
Section 103.27 Filing of reports.
(a)(5) Financial institutions that file more than 1,000 reports required by Section 103.22 in 1990 shall begin filing such reports by magnetic media by July 1, 1991.
Financial institutions that file more than 1000 reports required by Section 103.22 in a subsequent calendar year shall, within six months of the close of that calendar year, begin to file such reports for all subsequent calendar years by magnetic media as specified by the Secretary.
Dated: August 23, 1990
Copyright © 1990 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 1, No. 9, 9/90
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