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#1230777 - 08/11/09 03:25 PM One time large cash transactions
Tryin-2-Comply Offline
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How do other banks handle one-time large cash withdrawals - we have customers who may conduct a one-time cash transaction greater than $25,000 - we are struggling with the one-time transaction becuase we have had past examiners tell us that a large cash withdrawal is unusal and constitutes an automatic SAR filing.
1. our customer is purchasing investment property and wanted cash ($100,000)- made arrangements with branch personnel ahead of time. What would you do?
2. Customer over a six month period cashed an attorney escrow check for $45,000. Source of funds are known, long-term customer, no other unusual or suspicious activities have occured. What would you do?

It just burns me that it is believed that anything over $25,000 is an automatic SAR filing. My arguement - if we can't prove it's suspicious or unusual - then, we shouldn't file. If we filed on every cash transaction over $25,000 - it would bog the system down and then, where would we be?

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#1230792 - 08/11/09 03:33 PM Re: One time large cash transactions Tryin-2-Comply
Kathleen O. Blanchard Offline

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There are no "automatic filings" for cash >$25,000.

#1-as long as I felt the customer really purchased an investment property, I would document my reasons and not file.

#2-what do you mean "over a six month period cashed an attorney escrow check for $45,000" - do you mean that during the 6 month period that was the only large cash transaction? In that case, I would not file unless for some reason I thought there was something funky going on between the attorney and client (unlikely in the case of one check).

If you mean the customer somehow created a series of transactions less than $10,000 (by taking part cash, part bank check several times for example) I would take a look, determine possible reasons and possibly (probably) file.
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#1230863 - 08/11/09 04:08 PM Re: One time large cash transactions Tryin-2-Comply
Elwood P. Dowd Offline
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Quote:
...examiners tell us that a large cash withdrawal is unusal and constitutes an automatic SAR filing.


That's beyond ridicule, but I'm tempted to do it anyway. wink

Kaybee has answered your first question and your method of verification could simply be a review of local property transfers, but I don't understand the second scenario either.
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#1230922 - 08/11/09 04:46 PM Re: One time large cash transactions Elwood P. Dowd
JacF Offline

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$45,000 over a six-week period may be indicitave of structuring, but not over six months. That averages out to $7500 per month, and is more likely a sign that the customer doesn't want/need an inordinate amount of cash than it is of structuring.

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#1230953 - 08/11/09 05:08 PM Re: One time large cash transactions JacF
BetsyS Offline
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We've had similar comments. They view a large cash transaction like that as a red flag, and want to see that we've taken action. So to satisfy our examiners on cases like these, we fill out an SAR Investigation report to document that the suspicious activity was detected, investigated but that we have chosen not to complete an SAR.

Last edited by BetsyS; 08/11/09 05:09 PM.
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#1230986 - 08/11/09 05:48 PM Re: One time large cash transactions BetsyS
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We do all that - we have about 3000 of these SAR investigation reports - it's absolutely ridiculous the amount of paper we are keeping for a one-time transaction. For the customer who purchased the property - we did look at local property transfers, but couldn't find anything. He travels too, so it could have been anywhere. Also, the situation where it was over a 6 month period - basically we keep a large running cash report, sorted by customer and EIN, we can view all of our customers activity (in cash) by looking at this report - we keep each customer who has multiple cash activities and determine whether the activity makes business sense, etc. For our customers who have a one time transaction over a 6, 9 or 12 month period - we try to determine was it a purchase, attorney escrow check drawn on us for non-cusotmers, or our customer making a statement that they are concerned with the economy and they want cash.

all because of an examiner who felt that if Sally Joe is retired - she shouldn't have cash. go figure. We've argued this.....til I'm BLUE with frustration from holding my breath. Even though we have made decisions on some of these not to file - due to no history of anything "funny" on the customer - the examiner has gone back and made us file - with no reason - just stating its unusual for someone to take out that much cash! Maybe - but it is their money and if i can't say its suspicious or that they are money laundering or drug dealing or anything - I don't think i should file. It's crazy.

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#1231101 - 08/11/09 07:18 PM Re: One time large cash transactions Tryin-2-Comply
Tryin-2-Comply Offline
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ok, here is another one - what about funds are direct deposited from social security in the amount of $38,000. Customer comes into the bank next day and withdrawals cash. Here is my reason not to file. Each month when SS comes in, they withdrawal. So, what's different about this one other than the amount....

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#1231156 - 08/11/09 08:00 PM Re: One time large cash transactions Tryin-2-Comply
Ted Dreyer Offline
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Quote:
we have had past examiners tell us that a large cash withdrawal is unusal and constitutes an automatic SAR filing.


It appears that are misinterpreting the requirement for an SAR filing when:

"The transaction has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage, and the financial institution knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction."

It may be unusual and that would satisfy the first part of the quote, but there is an "and" that adds a second requirement. If you investigated and found that there was a "reasonable explanation", then this requirement is not met.

Any examiner saying a large cash transaction requires an automatic SAR should be asked which specific part of 103.18 requires it.

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#1231209 - 08/11/09 08:44 PM Re: One time large cash transactions Ted Dreyer
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trust me - been there and said that and asked for it. More than once.

AND - is the trigger that we've argued - but he says because we didn't ask why the customer wanted the money - even though we offered a cashier's check - and the customer refused - and that we offered to wire the funds - the customer refused - said he wanted cash - is unusual.

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#1231213 - 08/11/09 08:48 PM Re: One time large cash transactions Ted Dreyer
John Burnett Offline
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I urge you to be firm in your position that the bank has adequately determined not to file a SAR if you are satisfied that you have a reasonable explanation for the transaction. It's a no-win situation when examiners are able to bully bankers into filing SARs that the bank has determined are not warranted, especially if the examiner bludgeons the bank into agreeing that all cash transactions above a given trigger amount warrant a filing. That creates an expectation for future exams and can dig the bottomless BSA/AML pit deeper.

If this examiner does not see the error of his ways, you should escalate your discussion to a review examiner and, if need be, to the agency's ombudsman. I know that examiners are under a lot of pressure not to let things slide these days, but when they are wrong, they are wrong.
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#1231217 - 08/11/09 08:55 PM Re: One time large cash transactions John Burnett
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Thanks for the advice. i guess i move on to the "powers that be" to help in this situation. Argggg.

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#1231277 - 08/12/09 12:02 AM Re: One time large cash transactions Tryin-2-Comply
Curious Offline
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Despite the fact that the examiners' knowledge and interpretation of BSA/AML matters, and their understanding of the subject matter has increased exponentially in recent years, especially after the FFIEC Examination manual was first issued in 2005, the fact remains that some of them might still have only bookish knowledge and may interpret things incorrectly.

There is no automatic trigger for filing SAR in the case of large cash transactions. However, in case you have not reviewed those and appropriate documentation is not maintained to support your decission, then the examiners have a case for questioning these transactions and the absence of SAR. Absence of documentation is equal to ignoring the 'red flag' here.
If you have done everything correctly, then the examiners cannot second guess, and you can reasonably challenge them on this.

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#1231330 - 08/12/09 11:31 AM Re: One time large cash transactions Curious
Elwood P. Dowd Offline
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I'm more in the "let's discuss this until either you or your boss understand I'm right" camp, but I have seen some bankers react in a passive aggressive mode.

They simply start the SAR narrative by saying:

This report is being filed at the direction of [Regulatory Agency] personnel. We do not think the activity discussed below meets the requirements for SAR filing.
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#1231434 - 08/12/09 02:18 PM Re: One time large cash transactions Elwood P. Dowd
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Thanks for all the input - we have a strong program, therefore, conducting extensive reviews - that's my stand.

I'm with you Ken - "let's discuss until you get it" mode.

"Black and white textbook readers" - sigh.

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#1231882 - 08/12/09 10:55 PM Re: One time large cash transactions Elwood P. Dowd
fnbgal Offline
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Originally Posted By: Ken_Pegasus
I'm more in the "let's discuss this until either you or your boss understand I'm right" camp, but I have seen some bankers react in a passive aggressive mode.

They simply start the SAR narrative by saying:

This report is being filed at the direction of [Regulatory Agency] personnel. We do not think the activity discussed below meets the requirements for SAR filing.


This is exactly what bankers were told not to do at a compliance conference I attended awhile back. It was at a "meet the regulators" session and the regulators said that FinCEN had asked them to tell us that if we put in the narrative section of the SAR that we didn't think the transaction was suspicious then we shouldn't be filing a SAR.

I raised my hand and said that this conflicted with what some examiners (and auditors and other bankers) were telling banks and that maybe FinCEN should communicate this more clearly.

I don't remember what the response was, but I know it continues to be confusing for some of us.

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#1231948 - 08/13/09 09:33 AM Re: One time large cash transactions fnbgal
Elwood P. Dowd Offline
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Quote:
if we put in the narrative section of the SAR that we didn't think the transaction was suspicious then we shouldn't be filing a SAR.


I think that's their point. They know they should not be filing a SAR. They are filing it because their regulator thinks they should and they are going along in order to get along.
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#1232171 - 08/13/09 04:26 PM Re: One time large cash transactions Elwood P. Dowd
John Burnett Offline
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Like it or not, as long as there are examiners from agency A opining on regulations or rules from agency B, there will be conflicts like this. With SARs, the question is further complicated by the fact that each regulator has its own SAR filing regulatory requirement, even though FinCEN supposedly dictates how the SARs should be completed.
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#1232174 - 08/13/09 04:27 PM Re: One time large cash transactions Elwood P. Dowd
fnbgal Offline
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If I came across like I was critizing them for filing that was not my intention. I really was just trying to defend Dazed&Confused's thought process by sharing what was said at a conference and that maybe FinCEN should communicate more clearly with the examiners.

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#1232178 - 08/13/09 04:29 PM Re: One time large cash transactions fnbgal
John Burnett Offline
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Of course. In spite of the fact that we have to operate in the real world, we should never lose hope that things might improve.
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