Final Rule...Finally Adopted!

We've been telling you for several months that this rule was on its way. Leave it to Treasury to give it to us to put in effect just in time for all our summer vacations!

The Final Rule of the Amendment to the Bank Secrecy Act Regulations (effective August 13, 1990) is listed below.

DEPARTMENT OF THE TREASURY
31 CFR Part 103
Action: Final rule
SUMMARY: Section 6185(b) of Title VI of the Anti-Drug Abuse Act of 1988, Pub. I No. 100-690, November 18, 1988, prohibits financial institutions from issuing or selling cashier's checks, traveler's checks, money orders and bank checks in amounts of $3,000 or more in currency unless the financial institution verifies and records the identity of the purchaser as the Secretary of the Treasury shall prescribe in regulations. This is in addition to Treasury's authority in 31 U.S.C. 5313 to prescribe reports on domestic coins and currency. By this Final Rule, Treasury is requiring that Financial Institutions record this identifying information and maintain a chronological log or logs of the sales of these instruments.

BANKERS' HOTLINE has tried to make the job of informing all employees of this new ruling as easy as possible.

On the next page you'll find a simplified explanation of the new rule that can be duplicated and distributed to each employee. We've added a line where each can sign and date, acknowledging the fact that the information has been received and read. This signed copy should be kept in their personnel file. Give each employee an extra copy of their own so they can better explain to their customers the reason behind the change.

THE FORM FOR LOGGING $3,000-$10,000 CASH SALES
Subscribers have with this issue of BANKERS' HOTLINE a form for record keeping in accordance with the new Final Rule.

The form has been devised so that it asks for a little more information than the Final Rule requires from your own depositors.

The Final Rule requires the checking of the signature card and the comparison of current information received from the individual to the information on the card.

Experience tells us it's easier to just record the information from the purchaser than to look up the card, compare the information, return the card, etc.

We've added questions that should be asked of every purchaser, such as whether the transaction is on someone else's behalf, and if there was over $10,000 worth of cash transactions today. The Treasury expects us to determine such facts.

We've left room on the form for your institution's name and the location of the office.

SEND TO CENTRAL LOCATION
There is a space on the right hand side at the bottom of the form for you to add the information on where you want the log sent at the end of the month.

The office has until the 15th of the month to forward the form to a central location. Having the log sheets at that central location by that date is what your examiners will be looking for. We stipulated sending them at the close of business on the last day of the month to give you a cushion. You are required to keep these records for five years. Even blank ones should be sent, and kept, indicating compliance.

NO NON-DEPOSITOR SALES A POLICY?
You may have made a policy that you are not going to sell money orders, bank checks, or traveler's checks to non-depositors, and so have no need of the whole form.

REMEMBER YOUR EXCEPTIONS!
Exceptions are the rule of the banker's life. You should have the capability of logging those transactions, even though-at this moment-you have no intention of allowing those sales to happen.

When your million dollar depositor's sister is visiting from out of town and wants to buy traveler's checks, you're going to need this form!

SUSPICIOUS TRANSACTIONS
If an individual is reluctant to produce identification; or takes back part of the currency to reduce the purchase to below $3,000; or comes in on consecutive or near-consecutive business days and purchases bank checks, money orders or traveler's checks in amounts of less than $3,000, there may be good reason to suspect money laundering.

In such a case, according to Treasury, you are fully justified in filing a suspicious transaction Currency Transaction Report. On the first line of the new CTR (4789), there is a place to indicate a suspicious transaction.

The $3,000 Rule is not complicated, but it will cost us some time. Users of the form say it takes between 7 to 10 minutes to fill out. Knowing that it is helping in the "war on drugs" may help justify the time it takes.

Copyright © 1990 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 1, No. 6, 7/90