Our BSA policy states that we do not sell monetary instruments (for cash or anything else) to non-customers. There is a local chapter of a national charitable organization that has brought in cash from fundraisers for our teller staff to count and convert to a cashiers check to the national charity.

If we decide to start taking in this cash and issuing the checks, what other items should concern our BSA Officer? We are considering establishing a CIF record for OFAC purposes and for tracking the checks. There would still be no deposit relationship so this would be a non-customer MI for BSA purposes.

Should we track these as exceptions to our BSA policy? Would a folder called "BSA exceptions" be a worse red flag than changing our policy for national charities and the like? (Note: BSA Officer doesn't want to change policy, but, of course, the BSA Officer thinks we should send this charity to their own bank.)

I had help from an long time examiner at our local fed when I was working with my BSA policy. When we got to this section he looked at me a said "are you absolutely sure you will not EVER sell MI's to non-customer, ever?" His point was that chances are you will eventually sell a MI to a non-customer and if your policy is written like yours is (and mine was) you will be breaking your policy which is a huge issue. He suggested that I relax that paragraph by saying we normal don't sell MIs to non-customer, however, if for some reason we do it must be approved by a bank officer.

Did you track these exceptions and do any further reporting?

I haven't had any yet, we're new, but the BSA Officer at the bank I came from did track them and kept them in a binder for further reference and will I. I don't believe there was any reason for further reporting barring any suspicious activity, but I know that audit and exam did review them each time they came in.

Turtle, I would see it as a flag if you labeled any of your day-to-day folders as BSA Exceptions. I'd relax at least the written portion of your policy, as opsoff mentioned. A remember the purchaser is the individual, not the the organization, so you need the individual's address and identifying info for each cash purchase.

You also need to include an out for "swapping" on-us checks for official checks if you allow that practice. That is also a "sale" to a non-customer.

BrendaC - really? We went to the mat on that one, with an external auditor. We pointed to the regulation, which says the recordkeeping requirements kick in when the instrument is purchased with currency. If you swap a check for a check, the new check you create is not a "monetary instrument" as referred to in the below reg, because it was not purchased with currency, in my opinion.

http://www.occ.treas.gov/BSA/pages_manual/regulations/31CFR103.htm

31 CFR 103.29(a): No financial institution may issue or sell a bank check or draft, cashier's check, money order or traveler's check for $3,000 or more in currency unless it maintains records of the following information, which must be obtained for each issuance or sale of one or more of these instruments to any individual purchaser which involves currency in amounts of $3,000–$10,000 inclusive