It is my understanding that public schools are exempt under Phase I, but I would like to know if state universities are as well, i.e. University of "State" Community College. Thanks very much.

It is not the name that is important, it is whether or not it is a public or private school.

So if I said that it was a state-supported 4 year institution, then that would indicate a public school and therefore could be considered Phase I. Am I correct in my thinking?

Does anyone have any input on my question? I haven't been able to find any information on state-supported universities elsewhere.

One more thing I want to clarify: if I am going to add to my Phase I Exemptions, I do not need to send an initial designation to FinCEN - Correct? Do I just need to keep a list of my Phase I Exemptions?

The regulation recognizes "government entities," not schools, as exempt persons. You will not find advice focusing on schools.

Go to your college or university's web site and look for language that indicates whether it is supported by public funds. (My alma mater's web site says the state gave them $122,000,000 last year. If they receive that much money from the state they are tax supported and a government entity.) Print out what you find and put it in the file.

You must file a DOEP form on some, but not all, Phase I exempt persons. Banks & government entities: no. Publicly traded companies listed on a major exchange and their subsidiaries: yes.

There is no legal requirement to keep a list of exempt persons; it's simply a practical necessity.

I had found an article on BankersOnline, albeit from 2003, where the question is posed, "Are public schools exempt as a government agency under CTR reporting?" An attorney had replied that they indeed were exempt because it was a local government entity. I figured that that the same reasoning would apply to a university that was state supported monetarily speaking. Here is the link: http://www.bankersonline.com/articles/bhv13n02/bhv13n02a25.html

I came on looking for advice on this because our on-site FDIC examiner told me that my town high school designations were not valid under Phase I; and asked me to revoke them all. Then, I got an unsecured e-mail from the examiner with a list of customer names and account numbers for my CIP sample.... ummmm.... is that NOT a violation of Privacy??? So, I'm not sure where to go on this. The language in the regulation just says local government, but I too saw the 2003 answer from the attorney referenced in a posting above that public high schools could be exempt under Phase I.

I remain confused.....

Buzz,
You are not confused. Your examiner is. If it is a publicly supported, school, college, or university it is a government entity and meets the definition of a Phase I exempt person.

This has essentially been "black letter" law since the first set of exemption rules was issued in the late 1980's. (The "attorney" who answered the question is a former Treasury official; there is no room here for intelligent debate.) Perhaps it's presumed to be so widely understood that it is taken for granted; i.e. I find no reference to colleges, schools, and universities and exemptions in the BSA/AML Examination Handbook.

Call FinCEN's friendly 800 number and then put the examiner on the phone...

Retread,
You wouldn't happen to have a copy of Publication 1387 lying around somewhere, would you? If memory serves...

31 CFR 103.22(d)(5)(ii) says that an entity generally exercises governmental authority if it has the power to tax. I'm not sure if it is the case where you are, but in many states local school districts have the power to levy property taxes.

That's a critical distinction. For example, the University of Pennsylvania is a private, not state, university. Next door, in New Jersey, Rutgers University is a state school.

This is a good example of an examiner's statement that should not go unchallenged. Admittedly, the language in the regulation leaves a lot to be desired in the realm of clarity. But this examiner's declaration begs for a counter of "I have always understood that government has considered education to be one of its roles. Can you share with me an official source for the interpretation that a town high school doesn't qualify as an entity exercising governmental authority?"

Just to make sure- is it the actual school you have exempted? You cannot exempt any type of parent-teacher organizations or similiar clubs from my understanding.

I took the advice here and called FinCEN who verbally told me that public schools are considered a Phase I exemption; they also told me they receive this question frequently. Although they would not put it in writing, they invited myself and the examiner to call back together. When I politely explained my findings to the examiner, I was told that my information was incorrect, that high schools are not a Phase I exemption. I explained I had phoned the office who wrote the regulation to get my answer. When I asked the examiner to call with me, my answer was an attack on our entire exemption process and accusation that most likely our current designations were also wrong. I offered the files up for a complete review, but that too was denied.

I've been waiting for weeks for the exit meeting to see what was going to be said, and in the end, I received one more verbal chastise, the all-knowing "you're lucky this time" look, but nothing got put in writing. I do have to say, it was an incredibly exasperating, and borderline abusive experience. It's over though, and as soon as I get my straight-jacket removed I can go get my ulcer taken care of.

Call your regulatory ombudsman and provide your feedback regarding your examination process. That is exactly what they are there for.

I second Randy's suggestion. You had a rogue examiner with an attitude, and unless you or some other bank complains upstream to an Ombudsman or a regional supervisor, the abusive behavior will be rained down on other bankers, too.

It's apparent this individual couldn't handle the fact that you challenged him (a gender assumption on my part, but I think I'm right), and lashed out in a pathetic defensive response. He needs to be retrained or find another line of work.

I worry about his wife and kids, if he has any.