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December 17, 2014
Integrated Disclosures - An Implementation Strategy
Mary Beth Guard and Jack Holzknecht

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Loan Review Best Practices for a Community Bank
Bob Fritzlan

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PREPAID PRODUCTS - Understanding the CFPB Proposal
John Burnett

January 6, 2015
Business Accounts Documentation and Procedures with Beneficial Ownership
Deborah Crawford

January 6, 2015
FFIEC Cybersecurity Initiatives and Observations from the 2014 Assessments
Susan Orr

January 15, 2015
The ABC's of IRAs - The Basic Ingredients
Patrice Konarik

January 20, 2015
B & Z Appraisal Rules - Getting Them Right
Jack Holzknecht

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HMDA Soup to Nuts
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#1034745 - 09/04/08 02:05 PM Privately owner ATM's and like
P*Q Offline

Power Poster

Registered: 05/29/01
Posts: 7363
Loc: By the ocean
We've had an audit where it was recommended that we review our convenience store customers, bars, etc to see if there's ACH activity that would indicate a privately owned ATM on the premises. I have no problem with that, we do have a couple of small stores that do have these ATM's on-site. What additional due diligence steps should I do? I've read the BSA exam manual on privately owned ATM's and ISO's etc but I'm still confused about this whole thing. Anyone have any insight?

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BSA/AML/CIP/OFAC
#1034817 - 09/04/08 02:51 PM Re: Privately owner ATM's and like [Re: P*Q]
devsfan Offline
Diamond Poster

Registered: 06/25/04
Posts: 1861
Loc: NYC
PM me with your e-mail address and I'll send you our procedures.

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#1035112 - 09/04/08 11:21 PM Re: Privately owner ATM's and like [Re: devsfan]
horizon Offline
Member

Registered: 02/23/06
Posts: 53
Our institution recently had an exam and though the privately owned ATMs were identified and the accounts are being reviewed it wasn't part of the policy. It was considered in the enhanced due diligence section. Devsfan, I will me you with the my email for your procedures.

My question is, the BSA Manual indicates -- Reviewing corporate documentation, licenses, permits, contracts, or references, including the ATM transaction provider contract -- how far do you go with this and how does this affect the risk? Will they really give you this information?

Thanks

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#1035151 - 09/05/08 08:04 AM Re: Privately owner ATM's and like [Re: horizon]
Retread Offline
Diamond Poster

Registered: 10/31/03
Posts: 2494
Loc: Southeast
"My question is, the BSA Manual indicates -- Reviewing corporate documentation, licenses, permits, contracts, or references, including the ATM transaction provider contract -- how far do you go with this and how does this affect the risk? Will they really give you this information?"

We ask for all of that. If they do not give it to us, we close the account.
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#1035185 - 09/05/08 08:48 AM Re: Privately owner ATM's and like [Re: Retread]
devsfan Offline
Diamond Poster

Registered: 06/25/04
Posts: 1861
Loc: NYC
We request a copy of the agreement, try to do a site visit and then monitor the activity. This has passed regulatory muster so far.

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#1035712 - 09/05/08 02:02 PM Re: Privately owner ATM's and like [Re: devsfan]
Maytagman Offline
Gold Star

Registered: 06/18/08
Posts: 285
Loc: South
We haven't seen anyone unwilling to provide copies of 3 months of ISO statements and a contract, where applicable. We rate them as higher risk if they have more than a handful of ATMs, and if the ATMs are located far away from our locations or our customer's locations, and if the ATMs are located in HIDTAs or other high-risk areas.

One customer thought to have one convenience store was discovered to be operating a dozen convenience stores, each with its own ATM, owned and operated by the customer. No problem with getting the documentation, though. The only one who was squirelly was one who suddenly had to change the name of his business (a year after opening his account) when we started asking questions about his ATM activity. I see some similar behavior with MSBs sometimes - you get them on the phone and ask about check-cashing, and all of the sudden, they don't know anything about check-cashing because they are in the process of selling the business to someone else from the same country.
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#1037799 - 09/09/08 01:33 PM Re: Privately owner ATM's and like [Re: Maytagman]
E.G.B. Offline
Power Poster

Registered: 07/23/02
Posts: 6533
Loc: Behind you
On this topic, does anyone know anything about MetaBank in Storm Lake Iowa? Funds to a known private ATM account are being ACHed from here, and a search of ACHs reveal another customer receiving funds from/through the same bank, in patterns indicative of another potential, previously un-identified private ATM.
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#1037881 - 09/09/08 02:25 PM Re: Privately owner ATM's and like [Re: E.G.B.]
Retread Offline
Diamond Poster

Registered: 10/31/03
Posts: 2494
Loc: Southeast
Is it possible that you could be seeing transactions relating to prepaid cards?

http://www.creditcardxpo.com/metabank-credit-cards.asp
_________________________
Politicians are like diapers. They need to be changed often and for the same reason.

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#1037899 - 09/09/08 02:34 PM Re: Privately owner ATM's and like [Re: Retread]
E.G.B. Offline
Power Poster

Registered: 07/23/02
Posts: 6533
Loc: Behind you
Possible, I found that one too.
_________________________
I know I'm getting what I want for Christmas because I already bought it for myself.

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#1138180 - 03/02/09 09:48 AM Re: Privately owner ATM's and like [Re: devsfan]
lstark Offline
Gold Star

Registered: 11/30/05
Posts: 431
I would also like a copy of your ATM procedures. We just found out that we have 2 privately owned ATM's and we don't have any procedures nor are they included in our Risk assessment of products and services. What are the major concerns with privately owned ATM's? How do we know if an ISO is involved. I really appreciate the help.



Edited by lstark (03/02/09 10:37 AM)

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#1138210 - 03/02/09 10:26 AM Re: Privately owner ATM's and like [Re: lstark]
Ted Dreyer Offline
Diamond Poster

Registered: 04/05/01
Posts: 2222
Here is a link to the section of the BSA Manual that covers privately owned ATMs. It has some good information on the risks and mitigation of the risks.

Private ATMs

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#1138260 - 03/02/09 11:22 AM Re: Privately owner ATM's and like [Re: devsfan]
divadee Offline
New Poster

Registered: 05/12/06
Posts: 18
I've recently come across a privately owned ATM and am at a loss. Would you mind sharing your procedures with me as well?

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#1138972 - 03/03/09 11:56 AM Re: Privately owner ATM's and like [Re: divadee]
Steve Doty Offline
100 Club

Registered: 03/01/07
Posts: 137
Loc: Nebraska
Ditto - they would be helpful! Thanks

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#1157756 - 04/03/09 04:59 PM Re: Privately owner ATM's and like [Re: Steve Doty]
Buckeye Offline
Member

Registered: 01/06/04
Posts: 63
Loc: Ohio
Same here, could I have a copy of the procedures?

Thanks

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#1158319 - 04/06/09 01:19 PM Re: Privately owner ATM's and like [Re: Buckeye]
Kitcat19 Offline
Junior Member

Registered: 08/17/07
Posts: 45
Loc: Florida
Pizza Queen,

Our policies follow along with Devsfan and Maytagman. A site visit is a definite along with copies of statements and contract. We did end up closing an account for a non-cooperative customer who we discovered had a private ATM in a casino (she never told us about this one) and did not want to provide documentation we requested. I would hesitate to offer services to a customer, as Maytagman said, whose ATMs are located far from their business locations.

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#1167836 - 04/22/09 10:02 AM Re: Privately owner ATM's and like [Re: P*Q]
complybsa Offline
Member

Registered: 09/10/08
Posts: 79
Loc: New Jersey
I also just discovered that we have a long time cutomer (bar owner)that has an ATM. Recently they are requesting large amounts of cash (all $20's) We have not addressed this in our BSA Policy and was hoping that someone can offer some advice. Thanks

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#1167844 - 04/22/09 10:08 AM Re: Privately owner ATM's and like [Re: complybsa]
Trees Offline
Power Poster

Registered: 04/22/05
Posts: 3741
We have a few privately owned ATMs, that is, they purchase the machines and them set them out in all kinds of places: bars, hotel lobbies, malls, etc. they are rated (forever) high risk. Each month branch takes a total of cash outs and ACH ins. Should come close. If you see a major blip on one side but not the other that means some cash appeared and fell from the sky, and this would need an explanation. Also, a major blip in a non-blip time (for example, increased usage should be expected on holidays) that should prompt more questions. S&S had no problems with this. that being said, I hate these companies!

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#1167874 - 04/22/09 10:32 AM Re: Privately owner ATM's and like [Re: Trees]
complybsa Offline
Member

Registered: 09/10/08
Posts: 79
Loc: New Jersey
I assume that when you say branch monthly looks at cash out and ach transactions in - your customers have a seperate account for the ATM - Our customer has only one account and runs all transactions (Ex payroll,cash deposits) no ACH transaction - so not sure how I can monitor this - any suggestions?

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#1167888 - 04/22/09 10:51 AM Re: Privately owner ATM's and like [Re: complybsa]
Ready to Retire Offline
Diamond Poster

Registered: 08/26/05
Posts: 2313
Loc: Living in the land of Oz
The same with our customer. So it is hard to determine what is happening because of the ATM and what is the normal course of business.

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#1184342 - 05/15/09 10:24 AM Re: Privately owner ATM's and like [Re: Ready to Retire]
YosemiteSamIAm Offline
Power Poster

Registered: 01/29/04
Posts: 2736
Loc: Bizarro World aka Obamaville
I would like to reopen this discussion. Doesn't anyone consider this to be overreaching on the part of FinCEN? Why should banks, simply because they have a loan relationship or deposit relationship with an entity that has an ATM onsite be responsible for monitoring the activity of that ATM?! I can see it if we are supplying cash for the ATM, but just because an ATM is on their premises does NOT mean we have to play investigator and policeman on it. Let the feds pressure the states to require licensing and inspection of those ATMs. I swear, if we don't start saying "no" on occassion, we're all going to regret it.
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#1184381 - 05/15/09 10:52 AM Re: Privately owner ATM's and like [Re: YosemiteSamIAm]
BrendaC Offline
Power Poster

Registered: 09/18/01
Posts: 6029
Loc: Sweet Home AL
I personally think that much of what we do in the investigative arena qualifies as "over reaching". But that is now our reality. Obviously, the primary goal of monitoring ATM operations is to ensure that they are not being used to launder ill gotten gains. We need to understand where the money being loaded into our customer's machine is coming from if it isn't coming from us. And is the money they are withdrawing from us really being used for ATM purposes. Pretty consistent with the other cash flow monitoring we are required to do. And actually it is a necessary piece of the cash flow puzzle for a multi-faceted, cash intensive business.
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Life without Jesus is like an unsharpened pencil - it has no point.

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#1184460 - 05/15/09 11:49 AM Re: Privately owner ATM's and like [Re: BrendaC]
Georgia Plum
Unregistered


It's called job security and today I am thankful for that!

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#1184466 - 05/15/09 11:54 AM Re: Privately owner ATM's and like [Re: YosemiteSamIAm]
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17562
Loc: Another trip around the sun
Quote:
Doesn't anyone consider this to be overreaching on the part of FinCEN?


I agree with your conclusion, but will not put the fault at FinCEN's feet. They are a co-author of the Handbook, but each of the five families also participates in the development process.

The historical precdent is MSBs. Initially, the FDIC's examination procedures made their supervised institutions the de facto regulatory agency for MSBs. They never anticipated the backlash; i.e. that banks would simply say "We're not doing that" and summarily close MSB accounts.

Retread acknowledges that "no documentation, no account" is a policy his bank is willing to enforce. As for me, I agree. I would follow every Mickey Mouse suggestion my regulator offers, but I'm passing every dime of the cost on to the customer; e.g. "If you provide financial services, whether it is cashing checks or offering an ATM, here's your fee schedule." blush


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#1184494 - 05/15/09 12:05 PM Re: Privately owner ATM's and like [Re: ]
rdelgado Offline
100 Club

Registered: 12/01/05
Posts: 116
Is the question meant to ask if the ATM activity does not touch the institution, should there be any monitoring performed?

In my opinion, if we get the ACH credits OR see the cash withdrawals (preferably both, obviously), then most definitely we should be aware if the cash flow is not as it would be expected. The only way to know that is to investigate/monitor to make sure that it is.

I think if the ATM money is flowing completely through another institutions, aside from wondering why we don't have the entire relationship, it is still a piece of information I would want to know about. Knowing all services offered by one of our customers is vital information not only in BSA land, but in other areas of the institution also. I don't think I would give the account the same depth of review as the businesses that have ATMs that are serviced through an account here, however knowing that they have an ATM on the premises would give me enough cause to be aware of the activity in the relationship 'just in case'.
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#1184509 - 05/15/09 12:16 PM Re: Privately owner ATM's and like [Re: ]
YosemiteSamIAm Offline
Power Poster

Registered: 01/29/04
Posts: 2736
Loc: Bizarro World aka Obamaville
Originally Posted By: Georgia Plum
It's called job security and today I am thankful for that!
All this "job security" is going to send me to an early grave...where's the "plus" in that?
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