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#1473827 - 11/30/10 06:19 PM Cash Exchanges
KDF Offline
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KDF
Joined: Jul 2009
Posts: 79
Minnesota
I'm wondering what, if any, procedures other banks have in place for monitoring cash exchanges for money laundering, i.e. a customer comes in with $5,000.00 in twenties and asks for hundreds. Are you writing tickets? Keeping some kind of log? Do you ask the person requesting the cash exchange their name? If the exchange is greater than $10,000.00 are you completing a CTR?
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#1473834 - 11/30/10 06:25 PM Re: Cash Exchanges KDF
Elwood P. Dowd Offline
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Next to Harvey
I'll take this one:

Quote:
If the exchange is greater than $10,000.00 are you completing a CTR?


Yes, they definitely are. The regulation requires the reporting of currency exchanges. That's true even if the customer is recognized as a Phase II exempt person.

Currency exchanges by a customer recognized as a Phase I exempt person are not reportable.
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#1473836 - 11/30/10 06:28 PM Re: Cash Exchanges KDF
Doug Hendrickson Offline
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We treat it as a cash in and cash out on the system. No tickets will get produced, but the transaction will hit our $3,000 - $10,000 or CTR report as approriate. We do get the customer's information.
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#1473882 - 11/30/10 07:40 PM Re: Cash Exchanges Doug Hendrickson
J2C Offline
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Big Brother knows and that's a...
All currency exchanges get processed through teller and are aggregated with other currency transactions. If the other currency transactions and the exchange meet the $10,000.01 threshold, a CTR is filed.

A CTR would be filed if it were just an exchange as well over $10,000.
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#1474710 - 12/01/10 08:58 PM Re: Cash Exchanges J2C
NewTooBSA Offline
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Joined: Nov 2005
Posts: 568
Texas
During our last exam (OCC) we were questioned on our procedures for currency/cash exchanges and we really had not addressed it.

We now do cash in and out tickets for all transactions between 3,000 - 10,000, have a currency exchange ticket completed which lists the incoming denominations and outgoing denominations and have the customer sign it. This is sent along with the CTRs to BSA for monitoring.

Cash is aggregated along with deposits and withdrawals and if it meets filing criteria, CTR will be completed.

Hopefully it will satisfy examiners during the next exam.

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#1623760 - 11/02/11 09:05 PM Re: Cash Exchanges NewTooBSA
Patricia Offline
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Joined: Mar 2011
Posts: 327
Kansas
What about if a customer comes in to purchase a cashiers check for $5000 and the bank has them deposit the cash into their account and then debit their account for the purchase. Wouldn't this be circumventing the law?

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#1623773 - 11/02/11 09:19 PM Re: Cash Exchanges Patricia
BrianC Offline
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Joined: Nov 2004
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Illinois
Some institutions do this because that is the only way their AML tracking software can attach the cash to the customer. It does not circumvent the law because FinCen has issued guidance that requires these institutions to still record the Cashier's Check sale on their Monetary Instrument Log.
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#1623774 - 11/02/11 09:19 PM Re: Cash Exchanges Patricia
Elwood P. Dowd Offline
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Next to Harvey
No. It's referred to as an "indirect purchase" and is blessed in the Handbook on page 107. The practice does not eliminate the record retention requirement.

Although the practice has an official blessing and it makes a lot more sense than keeping a log, it really confuses some auditors and examiners.

Brian was just kidding about that log thing, you're not required to have one. wink
Last edited by Ken_Pegasus; 11/02/11 09:21 PM. Reason: Add comment about log
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