Customer A cashes multiple checks (made out to third parties but signed over to and indorsed by Customer A) drawn on another customer's account (Customer B) at our bank. Do I check box 31 (Negotiable Instruments Cashed) and box 35 (listing both Customer A's and B's account numbers)? Should I also check box 34 (Deposits/Withdrawals) to tie in Customer B's account number.

Negotiable instruments cashed- yes
Accounts affected - only the account they were drawn on (Customer B's); it did not affect Customer A's account according to your scenario, so you don't list it.

If you do the above, there's no need to check box 34 (Dep/WD) because you have already given the account number in Accounts Affected.

Thanks for the clarification!

Why are you cashing 3rd party checks?

It's a payroll situation. One person is cashing a bunch of payroll checks for a number of people. The person cashing the checks is our customer (Customer A) and the business that the payroll checks are drawn on is our customer (Customer B).

If the individual is cashing payroll checks for other individuals, I would assume that the other individuals (payees on the checks) are benefitting from the transactions and, therefore, you would need to identify each and every one of them in Part 1 Section A, with all of their identifying information. As such, you might want to reconsider doing this in the future.

devsfan -

We have a situation where an individual who has an account at our bank cashes checks for others through her business. She then brings them all in and cashes them to replenish her cash supply. In that case, she is the benefactor of the transactions. In most cases, though, we make the customer deposit them and withdraw any necessary funds in order to track it better. Just something to think about. Cashing 3rd party checks is not always a bad thing.

Nitpicking here: Her business is the person on whose behalf the transaction is conducted (not the benefactor).

Jack Henry CTR term - They call it benefactor and transactor in their Vertex program, so that's what I have been programmed to call it.

Just see if I help you out with any technical difficulties at the BOL Top Gun conference any more!! -- Vanna

I think what devsfan is saying ... is AuditorK has kind of gotten him/herself into a pickle.

There was a really big discussion on this not too long ago on BOL.

Devsfan is right ... AuditorK would need to identify each and every one of the employees (the people whom the transactions are conducted on behalf of) in Part 1 Section A, with all of their identifying information.

There is a minority opinion on the check-cashing agent scenario, and apparently FinCEN is in that minority. Based, I believe, on the now ancient FinCEN "shrimpboat" ruling (Ruling No. 2000-1), FinCEN has said (but not in a published ruling, to my knowledge) that unless one of the check payees will receive more than $10,000 from the check cashing transactions, the payees don't need to be in Section A entries. Instead, I believe, the company gets listed because the transactions are being done on its behalf (it is providing a check-cashing service to its employees and the company can't do it without the bank cashing the checks).

And, of course, the courier/agent of the company is identified in Section B.

At this year's BOL Top Gun Conference, we were told that FinCEN is trying to juggle its resources so that it can pull some of its old rulings off the shelf, dust them off and either revise them to accommodate current processing realities, rescind them if they are no longer relevant, or issue new rulings to address some of the most frequently asked questions.

If the multiple payroll check, one courier scenario hasn't raised the same question hundreds of times, nothing has.

The problem, I think, is that the "shrimpboat" ruling doesn't seem germane to the payroll check-cashing scenario on its face. So the sooner FinCEN can address the check-cashing question head-on with a ruling, the better. Then we can reconcile ourselves to whatever the ruling says, stop the gnashing of teeth on the issue, and move on to the next big BSA/AML issue.

Only an echo... I actually agree with Devsfan's analysis, but have heard FinCEN representatives say that you don't "know" the courier is cashing checks on behalf of those other payees so you don't have to list each payee on the CTR.

My overwhelming difficulty is the fact that I've actually been a teller. I did "know" they were presenting the items on behalf of their co-workers, particularly when none of the payees were our customers and the cash for each item went in a separate envelope.

Not requiring the ID for each payee is a direct subsidy to the business with the padded payroll. The better AML practice is just to refuse to do it.

Okay, here's a follow up question:

ABC Company pays its employees via check. Mr. X is an employee of ABC Company and brings to the bank checks for 50 other employees of ABC Company. The payees have all signed the backs of the checks and Mr. X also signs the back of each check. Mr. X cashes all 50 checks (money is placed into seperate envelopes with each of the 50 employees names on) and leaves the bank with $40,000. None of the individual payroll checks exceed $1,000.

Who's information should go in Section A? ABC Company...Mr. X...the 50 employees?

Then your CTR would be on Mr. X. He is the only one who is in the bank.

DS - Look back in this thread. This scenario is discussed in more detail. I'm still uncomfortable with not reporting that the individual payees are the persons on whose behalf the transaction is completed. Any observer of the transaction can see that the separate envelopes for each check cashed mean that each payee will receive his/her cash when (if?) Mr. X gets back to the company.

I'll say it one more time -- If FinCEN issues a definitive ruling on this scenario (which apparently isn't going away, given the number of times we've seen it discussed in Bankers' Threads), I'll be delighted to stop harping on it. Let's face it -- having all those individual payee names doesn't give law enforcement a whit of useful information, so it would make sense, IMHO, for FinCEN to rule and we can all move on.