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#1229102 - 08/07/09 01:58 PM CTR Exemptions
newbietoo Offline
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Joined: Aug 2009
Posts: 201
Hello,

I just recently changed positions in the bank and now work in the Compliance area, which is all new to me. My main responsiblility is BSA related items. I have read so much information, but unable to find definitive answers to a couple questions on CTR exemptions.

1. The rules state that the customer must maintain a transaction account for a certain time period (used to be 12 months). My question is: Are there specific types of accounts that are considered 'transaction' accounts, i.e. can it be a Savings account?

2. We have a customer that is a local ABC Board. Would they fall under a Phase I exemption?

Thank you for any assistance.

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#1229157 - 08/07/09 02:42 PM Re: CTR Exemptions newbietoo
rlcarey Offline
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rlcarey
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Posts: 79,625
Galveston, TX
1. Maybe: The term "transaction account" means a deposit or account on which the depositor or account holder is permitted to make withdrawals by negotiable or transferable instrument, payment orders of withdrawal, telephone transfers, or other similar items for the purpose of making payments or transfers to third persons or others. Such term includes demand deposits, negotiable order of withdrawal accounts, savings deposits subject to automatic transfers, and share draft accounts.

2. What is an "ABC Board"?
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#1229289 - 08/07/09 03:56 PM Re: CTR Exemptions rlcarey
newbietoo Offline
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Joined: Aug 2009
Posts: 201
Thanks!

An ABC Board has the authority and duty to operate one retail ABC store (liquor). The board consists of a chairman and two to six board members that are appointed by the city, town or county governing authority. The board retains authority to set policy and adopt rules in conformity with ABC Laws and Commission Rules.

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#1229318 - 08/07/09 04:07 PM Re: CTR Exemptions newbietoo
Lestie G Offline

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Joined: May 2002
Posts: 3,606
Near the Land of Enchantment
What does ABC stand for? Is this a government entity, then?
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#1229327 - 08/07/09 04:10 PM Re: CTR Exemptions Lestie G
Rocky P Offline
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Posts: 7,421
Florida
Usually alcoholic beverage control
Last edited by Southern Banker; 08/07/09 07:35 PM. Reason: correct stupid spelling mistake
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#1229525 - 08/07/09 06:38 PM Re: CTR Exemptions Rocky P
newbietoo Offline
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Yes, ABC is 'Alcoholic Beverage Control' and I'm trying to get that definitive answer as to whether they are a government entity and thus could be exempt under Phase I.

I appreciate all the responses!

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#1229786 - 08/07/09 08:38 PM Re: CTR Exemptions newbietoo
newbietoo Offline
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Posts: 201
Here is our dilemma, we have an exempt customer that has a DDA and a Savings account. Both accts have large cash activity. Can the Savings account transactions be included in the exemption? Or is the exemption limited to certain types of accounts?

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#1229801 - 08/07/09 08:46 PM Re: CTR Exemptions newbietoo
Kelsey D Offline
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Joined: Aug 2006
Posts: 516
Ohio
Yes, the savings account can be exempted as well.
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#1229979 - 08/08/09 01:12 PM Re: CTR Exemptions Kelsey D
rlcarey Offline
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rlcarey
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Galveston, TX
They have to have a transaction account to be exempted, but then all deposits and withdrawals from deposit accounts are exempt. On Phase II customer, what is not exempt are currency exchanges, the cashing of third party checks, etc, that are not documented as a deposit or withdrawal from one of their accounts.
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#1230420 - 08/10/09 08:20 PM Re: CTR Exemptions rlcarey
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,684
Cape Cod
Phase I exemptions can apply even if the exempt person does not have any account with your bank (103.22(d)(2)(i) - (v)), and extend to all currency transactions of those exempt persons. You can exempt, for example, a listed company in whose grocery stores you maintain branch offices, to cover the stores' purchases of cashier's checks from you in reportable amounts, even if the stores don't bank with you. Or a law enforcement organization that needs to conduct cash transactions, under the government entity exemption, even if it doesn't bank with you. [The exemption does not, however extend to the recordkeeping requirements relating to cash purchases of monetary instruments.]

Phase II exemptions under 103.22(d)(2)(vi) or (vii) only apply to transactions in exemptible accounts [" ...To the extent of its domestic operations and only with respect to transactions conducted through its exemptible accounts ... "], and are only available to customers who maintain a transaction account with you, and meet certain other requirements.

The exemptible accounts include transaction accounts and money market deposit accounts maintained in connection with a commercial enterprise.
Last edited by John Burnett; 08/10/09 08:28 PM.
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#1230422 - 08/10/09 08:23 PM Re: CTR Exemptions Kelsey D
John Burnett Offline
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John Burnett
Joined: Oct 2000
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Cape Cod
I don't believe that a phase II exemption will extend to cash transactions in the customer's savings account unless the savings account is one of the types that Randy enumerates. The cash transactions should take place in the transaction account. Transfers then to the savings account would get the money there.
Last edited by John Burnett; 08/10/09 08:26 PM.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
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#1230609 - 08/11/09 11:39 AM Re: CTR Exemptions newbietoo
Elwood P. Dowd Offline
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Elwood P. Dowd
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Next to Harvey
Quote:
An ABC Board has the authority and duty to operate one retail ABC store (liquor). The board consists of a chairman and two to six board members that are appointed by the city, town or county governing authority. The board retains authority to set policy and adopt rules in conformity with ABC Laws and Commission Rules.


It certainly sounds like a government entity to me, but this is a creature unique to your state. If you contact the state and they confirm that it is, document your research. After you have reached your own conclusions, it might be prudent to also discuss it with the EIC from your last exam because he or she probably already has an opinion on this point regardless of whether the research was done.

If it's a government entity the types of accounts they do or do not have is not relevant. They simply meet the definition of an exempt person and are not subject to CTR filing. It is not necessary for you to file a DOEP form on a government entity.
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#1232187 - 08/13/09 04:39 PM Re: CTR Exemptions Elwood P. Dowd
newbietoo Offline
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Joined: Aug 2009
Posts: 201
Thanks to all of you! All the responses have trully helped me out. I appreciate it!

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