Our BSA auditors recently cited us for incorrectly completing our CTRs. When we cash a personal check drawn off the customers own account - we have been checking Box 34. They are saying we should should consider this a negotiable instrument. Does anyone have any thouhgts on this? This is the first this has come up.

thanks,
beegee

This is what it says in the CTR-BSA Multi Purpose Compliance Manual...

When an individual presents an on-us check drawn on the individual's account in oder to withdraw funds, the transaction is to be considered a withdrawal and reported by checking both item 34 {Deposit(s)/Withdrawal(s)} and Item 32 {Negotiable Instrument(s) cashed} Conversely, when an on-us check is drawn on an account belonging to somone other than the presenter, the transaction is only a negotiable insturment cashed and is to be reoported by checking only item 32

Here's an excerpt from 1995 Treasury Department guidance that supports either approach:

24. Question: When an individual presents an on-us check drawn on an account of someone other than the presenter's account, which box should a reporting bank check? When an individual presents an on-us check drawn on the account of the presenter to withdraw funds from his/her own account, which box should be checked?

Answer: When an individual presents an on-us check drawn on an account of someone other than the presenter's account, the bank should check box 32 (Negotiable Instruments(s) Cashed). When an individual presents an on-us check drawn on the account of the presenter to withdraw funds from his/her own account, box 32 could be checked or box 34 (Deposit(s)/Withdrawal(s) may bec (sic) checked to indicate that the transaction is a withdrawal. In any case, list account numbers in Item 35 (Account Number(s) Affected).

On more than one recent occasion I have heard a FinCEN representative say that they really want Box 32 checked because they want to know that there was a check that they should be looking for and that it is perfectly acceptable to check both boxes. Accordingly, I think your independent reviewer might offer it as a valuable suggestion, but they have absolutely no basis for criticizing your approach and their comments should not be worded as such.

We only use box 32 if the check is cashed by a third party. Otherwise, we use box 34. Never had a problem from our regulators with that (FDIC).

Who publishes that?

That's what I was wondering. I googled it and found out that the National Association for Bank Security published it. I had never heard of it before.

That's Phil Gay's organization and it's certainly a credible resource, I just did not recognize the name. In this instance, I think the independent reviewer would be more likely to defer to the Treasury guidance.

All I know that this book is old and yes "NABS" published it.

Old BSA resources are like old dynamite, not to be trusted.

Speaking as an old BSA resource, I think I resent that!!!

Yes, but you have proven to be a renewable, er retreadable resource. I trust you more than I trust me.

thanks for the response!