CTR Backfiling

Where can I find information on when backfiling a CTR is required?

Are you talking about the identification of transactions not previously reported or correction of a past CTR?

It depends on what you mean by "backfiling". Backfiling normally means that your examiners have determined that you did not file CTRs you should have filed, and a referral has been made to FinCEN for a backfiling determination. Only FinCEN can make the actual backfiling determination after reviewing the facts of your situation.

If you mean filing CTRs that you discovered were not filed when they should have been, you should prepare them and send them to FinCEN with a cover letter explaining why the CTRs are late.

If you mean correcting previously filed CTRs, you do that my filing amended CTRs containing only the corrected information.

Here is a link to a page on FinCEN's web site that provides a telephone number you can call to discuss backfiling. It also provides the address to which requests for backfiling determinations can be mailed.

http://www.fincen.gov/dccphoneandaddress.pdf

I am aware of the information you provided. What I am looking for is some sort of regulatory guidance to include in training materials that explains this. Other than knowing that these are the procedures you are supposed to follow, I haven't been able to locate anything issued by FinCEN or anyone else that discusses backfiling and when it is required.

You are not likely to find that information since backfiling is handled by FinCEN on a case-by-case basis. If there are any banks out there that have been through the process, they may be willing to share their experiences with you.

I think that the idea is that this should never happen and therefore, you are not going to see much regulatory guidance on the issue of backfiling. Along with the information that has already been suggested, you might want to keep a pen and a checkbook handy also.

Maybe this will help. Backfiling determinations are normally the result of a bank improperly granting an exemption to CTR filing. When this happens, the bank is requested to contact FinCEN for a backfiling determination. FinCEN requests information from the bank on the transactions and determines whether or not the nature of the business conducting the transactions and the types and sizes of the transactions would warrant the backfiling of CTRs on those transactions. If it is determined that the transactions should be reported, FinCEN directs the bank to search the transactions for a given period of time and file appropriate CTRs. In some cases, it is determined that backfiling the CTRs would serve no useful purpose, but the bank is directed to file from a certain date forward. In any event, the bank is strongly advised to review its exemption granting process.

Here's more. Although it is not specifically designated as such, there is a backfiling determination letter on the FinCEN site. They used it as guidance for the "gross revenue" defininition FinCEN 2002-1 and ruled that a previously granted exemption was valid and no backfiling was required.

...only as a footnote to Retread's analysis, the other case where backfiling is common is when a bank has failed to do the biennial filing on a phase II exemption.

Agreed. That would be a situation where a bank did not file CTRs believing the customer was properly exempted when technically, the exemption ceased to exist on the day after the biennial filing was due, but was not filed.

It seems like everyone is talking about exempt customers... Does backfiling not apply to non-exempt customers if you identify a CTR should have been completed and filed but wasn't?

Lynne,
Yes, it applies. That's why rlcarey queried the original poster for a little more context to assure he knew what was being asked. However, the thread just took off without the response; it chose its own path.

If you find an individual or mutiple CTR's that were not filed on a non exempt customer, there is no backfiling determination or the equivalent of a "waiver" mechanism; i.e. you simply file them as soon as you can. The general suggestion is that you attach a memo to your file copy explaining how the error occurred, how it was discovered and what steps were taken to assure it will not happen again.

Mistakenly failing to file a CTR might be classified as negligent. Deciding not to file a CTR just because it would be late is not negligence. It is intentional and triggers considerations of criminality and much larger fines.

If memory serves, willful failure to file required BSA reports could even trigger the Annunzio-Wylie "death penalty".