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#1095272 - 12/10/08 09:15 PM Exemption of a Bank Subsidiary Question
thomasj Offline
Power Poster
Joined: Mar 2001
Posts: 5,063
Pennsylvania
My bank's holding company has a consumer finance company as a subsidiary. The finance company is incorporated and has their own EIN. The finance company has several branch locations and they maintain their deposit accounts through our bank. Occasionally their deposits, which consist of cash and checks from customers making their monthly payments, will aggregate to over $10k in cash and we will file a CTR.

I have been reading the old and new exemption regs for guidance on this, but it just isn't making sense today. To exempt them under a phase I exemption they would either have to be a Bank, Government Entity, or Listed Business. They are not a bank by definition in the reg; however, they are a subsidiary of a bank holding company - although the reg says nothing about bank holding company subsidiaries. Obviously they are not a government agency. They are technically a subsidiary of a listed business as our holding company stock is publicly traded on NASDAQ, but I feel that this may be a stretch.

If it were me, I would just continue filing the occasional CTR on them and leave it alone but our general compliance officer feels they should be exempt. The problem is that I would be the one defending the exemption to our auditors and the examiners. I feel it is a grey area and would rather err on the side of caution unless someone can provide me some further guidance.
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#1095318 - 12/10/08 09:48 PM Re: Exemption of a Bank Subsidiary Question thomasj
smash Offline
Gold Star
Joined: May 2004
Posts: 331
Texas
This is the way I would look at it:

Forget the bank aspect of it. Phase I exemptions have always included subsidiaries of listed companies. Since your holding company is listed, it is exempt as are its subsidiaries. Then add to that the fact you are a bank and are regulated by the federal government. I would agree with your compliance officer. FinCEN and law enforcement doesn't want CTRs on businesses and banks they already have a handle on through regulatory examination. It's the unregulated they're most interested in.

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