Bank Secrecy Basics, Part 6 Multiple Transactions - CTR General Instructions

Multiple transactions must be treated as a single transaction if the financial institution has knowledge that (1) they are by or on behalf of the same person and (2) they result in either currency received (cash-in) or currency disbursed (cash-out) by the financial institution totaling more than $10,000 during any one business day. For a financial institution, a business day is the day on which transactions are routinely posted to accounts, as disclosed to deposit account holders.

Reportable Multiple Transactions
According to Section 103.22(a)(1) of the Bank Secrecy Act regulations and the CTR (Currency Transaction Report - Form 4789) General Instructions, there are four basic qualifications which have to be met before you are required to combine two or more transactions and report them on a CTR as one transaction.

1) "...have knowledge"
Obviously, first we have to know about the transactions.

Some financial institutions have computerized systems that will combine all of the transactions on one account during the day. This will show up in a report the following morning, and the CTR is filed in the back office when the report shows the transactions exceed $10,000.

This system is most effective when all deposits or withdrawals are going into or out of the same account number. If multiple accounts are used, and are not linked by the system, the only way we can discover multiple transactions are through the observations and reporting of the people on the front line.

In these cases the transactions will be noticed by the employee handling the transactions. It is important to remember that if you notice the multiple transactions you must report them. The Bank Secrecy Act talks about "willful blindness", which in this instance means the transactions were noticed, but not reported. Willful blindness on the part of financial institution employees can lead to serious fines and difficulties for the organization. Under the Patriot Act, it could even lead to a felony charge. If you have knowledge the multiple cash transactions are taking place, they MUST be reported if over $10,000.

2) "...directly related"
In order to require reporting, the transactions must be directly related. Either they are:
a) done by one person only by and for himself (or herself)

b) done by one person for himself and someone else, or for himself and another organization or business

c) done by one person, but not for himself - completely on behalf of someone else or another organization of business

In these three cases, one person is doing all the depositing (or withdrawing) which is the important fact. Whether he or she is doing it for just himself or herself or is doing it also for another individual or organization is only important when you are filling out the CTR. For instance, it may be Charlie Cool is depositing cash several times a day into his own account, or he could be the manager of the local bowling alley and making the deposits into the bowling account. The important fact is that Charlie has been in your office several times during the day making cash deposits. No matter what accounts they go into - if they all add up to over $10,000 in cash, and you have knowledge that he did and that it does - report it on a CTR!

In a different scenario, Charlie may have come in with $16,000 in cash and split it evenly into eight different accounts. Again, the important fact is one person, over $10,000. It doesn't make any difference how many accounts he used. But you'll want the account information on the CTR.

d) done by two or more people, acting separately on behalf of the same person or organization.

In this case you may have one account with several people making deposits into the account. For instance Connie Cool's Health Spa has one account with your financial institution, but has four spa locations. The manager of each location comes into a different branch of your financial institution to make a deposit into the Health Spa account. Different people - but acting on behalf of the same "person" (Remember, the word "person" in BSA doesn't mean a person! In this case, it's the Health Spa account.)

3) "Over $10,000 total"
The aggregate total of the cash received (or disbursed) by the financial institution must exceed $10,000.

That word over $10,000 is important. Let's digress for just a minute's explanation of that wording. We have several laws and regulations that govern us. One, called the Right to Financial Privacy Act (RFPA) says we must not give information to a government agency about our customers or members without a subpoena or court order. So we can't report to the government on a CTR information we are not permitted to reveal. The Bank Secrecy Act and the CTR specifically state we are to report any cash transaction over $10,000. If we report a transaction that is exactly $10,000 we have violated the RFPA. Big trouble. However, even if the amounts deposited are way less than $10,000 and we are suspicious of the transactions - we don't file a CTR, but we are directed and obliged to file a Suspicious Activity Report. So we do have a mechanism to report. Just be sure you don't do it on a CTR!

4) ...during the same "business day"
The fourth qualification is that all of the transactions must happen on the same business day. For CTR purposes, business day means the date on which the reportable transaction is posted to a depositor's account, or, in those instances when the transaction does not involve the posting of an entry to a customer's account (e.g., an exchange of currency) the term means the date on which the transactions would have been posted to a depositor's account had such an entry been necessary.

This can mean some extra attention to timing if you are open on Saturday and/or Sunday. Postings on those days normally happen on Monday, and can trigger an over $10,000 multiple transaction over the weekend.

Don't combine transactions
If a deposit of $12,000 in cash is made in the morning, and then a withdrawal of $4,000 is transacted in the afternoon of the same day, it does not change the fact that a CTR has to be filed for the $12,000. No CTR for the $4,000 transaction. But you also don't subtract the $4,000 from the $12,000 and figure you only had an $8,000 cash deposit!

Copyright © 2002 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 12, No. 3, 4/02