CTRs: Documenting ‘Known’ Customers
Question: Re: Filling in a CTR - What are we to do when we don't have the identification called for on a CTR, but the customer is one of long standing, known to everyone in the branch, doesn't drive, and there is nothing but a signature card, probably 30 to 40 years old in file. If we write "known" on the CTR, it is returned with "incomplete information" on it. We have customers of long standing that don't have driver's license numbers. They have socials, and sometimes a lot of money, but not the documentation. This is creating a lot of frustration.
Answer: Well, there are a variety of ways to look at this question, depending upon the facts. The one thing to keep in mind under the BSA, especially in light of the new customer identification rules for new account openings, is that there must be at least one successful attempt to verify the identity of customers who
(1) open new accounts;
(2) conduct currency transactions that must be reported on a CTR;
(3) conduct wire transfers (either on the sending or receiving side); or
(4) purchase money orders, travelers checks, cashiers checks or other monetary instruments with $3,000 or more in cash.
The bank does not have to re-verify this information each time a transaction is conducted. It can, for example, consult a signature card or other reliable form of bank record to ascertain that the person conducting the transaction is the same person who had previously been verified. Let's assume the bank already had records of the long-standing customer. That is, when the customer opened the account, the bank resorted to a drivers license, passport or other form of identification to verify the identity of the customer.
Or, even if that didn't occur, let's assume the customer had already conducted a transaction that required verification (e.g., deposited more than $10,000 in currency). Once that verification occurred, the bank should keep records of the information used to verify the customer. This would mean in most cases the drivers' license, number and the state of issuance. In addition, records should also be kept of the customer's social security number or tax identification number (as the case may be) and street address. The bank wouldn't have to re-verify the customer's identification, as long as the bank confirmed it was the same person. However, the bank would have to enter the information it already had about that customer on the CTR itself. This would include the person's name, street address, SS Number (or other TIN), as well as the information the bank relied upon to verify the customer. If there is no driver's license, look to the identification that is permissible for senior citizens. If the bank had never verified the customer's identification (or obtained this information about the customer), the CTR could be deemed incomplete and might be rejected by the IRS Detroit Computing Center because of the missing TIN, address, etc.
Bottom line: the bank should get this information at least once and keep records of it so that it doesn't have to reinvent the wheel each time a known customer conducts a transaction that requires this information.
(Editor's Conclusion - Get some form of identification on the CTR. Otherwise, it will be returned as incomplete.)
Copyright © 2004 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 14, No. 2, 5/05
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