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October 24
How to Audit Advertising - Compliance Issues Here, There, Everywhere!;
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October 29
Documenting an Applicant's Intent to be a Joint Applicant;
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November 4
Issues with Deceased Customers;
Mary Beth Guard and John Burnett

November 5
Vault Burglaries, Floods, Fires & Other Disasters;
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November 6
MLO v LO - Who Has to Do What?;
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November 13
Domestic Violence & Workplace Violence: There Is A Link;
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#901615 - 02/07/08 02:37 PM CTR - include ATM?
Cat Woman Offline
Diamond Poster

Registered: 09/02/04
Posts: 1329
Loc: New England
We had a customer withdraw less than $10,000 at one of our branches. The customer then went to an ATM (not one of our machines) and withdrew a few hundred $$, which put him over the $10,000 mark. Would you file a CTR on this even though the machine isn't one of yours? My first thought was yes, but the more I think about it, the more unsure I am.

Thanks!

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BSA/AML/CIP/OFAC
#901631 - 02/07/08 02:45 PM Re: CTR - include ATM? [Re: Cat Woman]
Retread Offline
Diamond Poster

Registered: 10/31/03
Posts: 2489
Loc: Southeast
The key here is awareness. You know the customer did it, so you should file the CTR. You might also want to consider a SAR later down the road if this becomes a pattern.
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Politicians are like diapers. They need to be changed often and for the same reason.

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#901780 - 02/07/08 04:25 PM Re: CTR - include ATM? [Re: Retread]
MidMOAuditor Offline
100 Club

Registered: 08/17/07
Posts: 105
Loc: Missouri
I can see both sides of the argument. The cash proceeds were withdrawn from the customers account but the bank did not pay the currency out directly as specified in the regulation.

Can anyone clarify this one? We've had a pretty good discussion at work about this one but I can't find a definite answer online anywhere.

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#901829 - 02/07/08 05:04 PM Re: CTR - include ATM? [Re: MidMOAuditor]
MidMOAuditor Offline
100 Club

Registered: 08/17/07
Posts: 105
Loc: Missouri
I did find this piece.

"Transactions in currency" defined. According to the law, a "transaction in currency" occurs every time a person or a business deposits, withdraws or exchanges more than $10,000 in cash. This definition only includes physical transfers of cash, either in or out of your financial institution. Note that the transaction must involve actual currency in order to be reportable. Deposits or withdrawals by check and other noncash transactions are not subject to the CTR filing requirement.

Also, CTRs are only triggered if a physical transfer or exchange occurs. As a result, transfers between accounts, wire transfers, and other operational transactions that do not involve the physical transfer of cash are not subject to CTR filing requirements. Finally, remember that the CTR filing requirement applies to all types of customers including individuals, businesses and informal groups.

From that, I would say that no, a CTR would not be required since the transfer of cash did not occur through your bank.

Now, I don't think a CTR applies but I would say if this customer has done this multiple times enhanced due dilligence should be applied and the account monitored. If he continues to do it then a SAR should probably be filed for structuring.


Edited by MidMOAuditor (02/07/08 05:12 PM)

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#901830 - 02/07/08 05:06 PM Re: CTR - include ATM? [Re: MidMOAuditor]
#Just Jay Offline
10K Club

Registered: 10/26/06
Posts: 13671
Loc: Cheeseheadland
But I would still consider a SAR depending on the circumstances.
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#901837 - 02/07/08 05:14 PM Re: CTR - include ATM? [Re: #Just Jay]
devsfan Offline
Diamond Poster

Registered: 06/25/04
Posts: 1844
Loc: NYC
I have to disagree with not filing a CTR. The customer withdrew more than $10,000 in cash from his account with your bank and you have to file, especially since you have knowledge of the transactions. After filing the CTR I would consider filing a SAR for his clear attempt to structure the trnasactions, documenting your decision.

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#901840 - 02/07/08 05:20 PM Re: CTR - include ATM? [Re: devsfan]
BrendaC Offline
Power Poster

Registered: 09/18/01
Posts: 6029
Loc: Sweet Home AL
Our examiners specifically asked us to get with our vendor to modify our cash report to aggregate ATM transactions with other cash withdrawals for CTR reporting purposes.
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#901856 - 02/07/08 05:44 PM Re: CTR - include ATM? [Re: BrendaC]
MidMOAuditor Offline
100 Club

Registered: 08/17/07
Posts: 105
Loc: Missouri
The cash came from two different financial institutions. It would be just like him writing a check at the grocery store for $100 more than the bill.

Ultimately his account will be debited but that's not the same as cash and there was no physical transaction processed by his bank.

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#901950 - 02/08/08 08:51 AM Re: CTR - include ATM? [Re: MidMOAuditor]
Retread Offline
Diamond Poster

Registered: 10/31/03
Posts: 2489
Loc: Southeast
I agree that there are two different financial institutions involved, but the problem is that the funds ultimately came from the same bank, and there is a report that shows that. You can ignore it if you want, but I think the bank would be hard pressed to explain to examiners why they did not include the ATM cash withdrawals, no matter where they were, when determining if a CTR should be filed.
_________________________
Politicians are like diapers. They need to be changed often and for the same reason.

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#901965 - 02/08/08 09:05 AM Re: CTR - include ATM? [Re: Retread]
A_G Offline
10K Club

Registered: 07/21/04
Posts: 18954
Originally Posted By: Retread
I agree that there are two different financial institutions involved, but the problem is that the funds ultimately came from the same bank


Yes, but I don't think that matters. I could have an account at Bank A and Bank B. I could write a check to cash drawn on Bank A for 9,000 and cash the check at Bank A. Then I could write another check for 9,000 cash drawn on Bank A and cash it at Bank B. The funds came from the same account at the same Bank on the same day, yet you wouldnt file a CTR. You must likely wouldn't even know that this happened due to the float time - even if one of the Bank's processed the other bank's cash letter and the checks cleared the same day you wouldn't file a CTR.


Edited by AuditGuy (02/08/08 09:06 AM)
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#901975 - 02/08/08 09:21 AM Re: CTR - include ATM? [Re: A_G]
Retread Offline
Diamond Poster

Registered: 10/31/03
Posts: 2489
Loc: Southeast
You're right about the checks, but the bank does not have a report that aggregates those transactions like it does with ATM withdrawals. I can tell you that if you have any report that shows transactions that should be reported, you had better use it, or FinCEN can charge you with wilful blindness. I've seen it more than once. That's one of the oddities of the rules. If you have it, you had better use it. If you don't have it, you can plead ignorance. By the way, the check scenario you describe definitely deserves a SAR for structuring. Again, if you know it, you have an obligation to report it.
_________________________
Politicians are like diapers. They need to be changed often and for the same reason.

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#902068 - 02/08/08 10:59 AM Re: CTR - include ATM? [Re: Retread]
MidMOAuditor Offline
100 Club

Registered: 08/17/07
Posts: 105
Loc: Missouri
I agree with you Retread but there's still the fact that there was no physical transfer of cash from the bank which is explicit in the language of the regulation. The source of the funds are coming from two different financial institutions.

To be honest, this is the first time I'm actually researched this and it appears to be a loophole that could be exploited. ATM transactions should be aggregated, but unfortunately most the smaller community banks I've done BSA audits for don't have the software or means of doing this. I also know for sure one of the largest banks in Missouri doesn't aggregate ATM activity due to software limitations. But a foreign atm is different and the privately owned ATM's are a huge regulatory problem in themselves. While most banks put a limit on the amount of cash that can be withdrawn during a business day, usually $300 to $500, when aggregated it can still be in excess of $10,000. I can see a huge problem with potential money laundering if banks put a larger limit on the amount of withdrawal and people using third party atm's.


Edited by MidMOAuditor (02/08/08 11:03 AM)

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#902079 - 02/08/08 11:06 AM Re: CTR - include ATM? [Re: Retread]
A_G Offline
10K Club

Registered: 07/21/04
Posts: 18954
Originally Posted By: Retread
You're right about the checks, but the bank does not have a report that aggregates those transactions like it does with ATM withdrawals.


I hope I didn't imply that such a report exists. I was just trying to give an example that because two different banks are involved - all the funds are not leaving the same bank - so no CTR is necessary. Going backto my example, say the customer came into bank A and said, "I didn't want to fill out one of those forms so I just cashed a another 9,000 check from my accont here at Bank B down the road. Now you know of the two transactions - SARing aside - you still wouldnt file a CTR, because the money is going "over the counter" at two different banks even though cash is leaving the same account from Bank A in excess of 10,000 for the benefit of the same customer.

I agree with MidMO that physical transfer from the same bank is the key.


Edited by AuditGuy (02/08/08 11:11 AM)
_________________________
With the lights out, it's less dangerous.

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#903108 - 02/12/08 09:50 AM Re: CTR - include ATM? [Re: A_G]
Cat Woman Offline
Diamond Poster

Registered: 09/02/04
Posts: 1329
Loc: New England
Well, right or wrong, we did file the CTR. The main reason I felt we needed to was because we had knowledge that this happened and there's really no clear wording on what to do. We'll see what our auditors say when they review our CTR's.

Thanks for your help, everyone! I'm glad I'm not the only one who wasn't 100% sure on what to do here.

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