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#16421 - 04/29/02 07:41 PM BSA at the state level - Michigan
Bartman Offline
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Bartman
Joined: Oct 2000
Posts: 1,191
Springfield
Here's one that came out of nowhere:

During the middle of last week, Gov. Engler in Michigan signed several anti-terrorism bills. One of these (PA 183 of 2002) changes the Michigan Banking Code to require banks to send copies of CTRs filed with the IRS to the state police within 24 hours of filing. Beginning May 1.

No word as to where specifically to file. For paper filers (like me) this isn't too much of a procedural issue. For electronic filers, woe is you - are they set up to receive electronic info? Hopefully you won't have to convert to paper...

Here's the statute:
http://www.michiganlegislature.org/documents/2001-2002/publicact/pdf/2002-PA-0183.pdf

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General Discussion
#16422 - 04/29/02 07:47 PM Re: BSA at the state level - Michigan
Happy Birthday David Dickinson Offline
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David Dickinson
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Central City, NE
Nebraska has had a like law for several years (10 as far as I know). Also, Colorado requires SAR's to filed with the CO Dept. of Banking.
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#16423 - 04/29/02 08:24 PM Re: BSA at the state level - Michigan
Bartman Offline
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Bartman
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Springfield
Thanks, David.

'...came out of nowhere' refers more to the fact that I wasn't aware Michigan was considering this, let alone acting on it. I feel this one caught us by surprise.

It's nice to know other states are also dealing with this, but 8 days from filing to implementation doesn't make me feel very happy.
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#16424 - 04/30/02 12:19 PM Re: BSA at the state level - Michigan
Anonymous
Unregistered

Came out of nowhere is an understatement. This one seems to have even caught our state bankers association off guard. Where are you planning to send those paper CTRs in a couple of days?

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#16425 - 04/30/02 12:24 PM Re: BSA at the state level - Michigan
Anonymous
Unregistered

Does the law purport to apply to national and state charters?

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#16426 - 04/30/02 01:07 PM Re: BSA at the state level - Michigan
Elwood P. Dowd Offline
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Next to Harvey
This may be a bit worse than you think. Although the statute says "transaction reports" it references them as being required "...under sections 5313 to 5318 of title 31 of the United States Code." The specific reporting requirements of those sections are:

· Sec. 5313. Reports on domestic coins and currency transactions.
· Sec. 5314. Records and reports on foreign financial agency transactions.
· Sec. 5315. Reports on foreign currency transactions.
· Sec. 5316. Reports on exporting and importing monetary instruments.
· Sec. 5317. Search and forfeiture of monetary instruments.
· Sec. 5318. Compliance, exemptions, and summons authority.

Obviously, if all they wanted was CTR's, the reference would have only been to 5313 and they would have said "currency" transaction reports. It appears that everything you have to report under BSA, you now have to report to your state police.

I just wrote Mary Beth a note complimenting BOL on how civil its users are in their posts, so I am constrained from saying what I really think of this. Suffice it to say, your legislature did not do its homework. State and local law enforcement already have access to FinCEN's data base. They do not need a parallel data base. A legislature interested in improving the efficiency of law enforcement would be repealing these laws, not promulgating them.
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#16427 - 04/30/02 01:14 PM Re: BSA at the state level - Michigan
Bartman Offline
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Bartman
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Springfield
The best we've got so far is the following address from the MBA: Michigan State Police, 714 S. Harrison Rd., East Lansing, MI 48823.

The title language in the bill begins: "An act to revise and codify the laws relating to banks, out-of-state banks, and foreign banks..." 'Bank' isn't specifically defined in this bill. It's effectively an amendment to the Michigan Banking Code of 1999, so if that applies to you, so does this. I don't believe charter enters into the question.

And Ken, in the interest of keeping a civil tongue in my head, let's just say I wholeheartedly agree with you. Your point about FinCEN was my first question for the state association. Obviously, operational issues were not considered. Once again, write your congressman.
Last edited by Bart Jonker; 04/30/02 01:21 PM.
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#16428 - 04/30/02 01:16 PM Re: BSA at the state level - Michigan
Richard Insley Offline
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Richard Insley
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Posts: 10,178
Toano, VA
Ken's exactly right--states should use what's already at their disposal. Michigan banks may still be able to avoid expensive duplication if MBA can convince the State Police to issue a regulation declaring a proper filing with the IRS Detroit Data Center to satisfy the new law. After all, Detroit is in Michigan and the State Police can easily obtain FinCEN's permission to access the data base. Next session, MBA and the State Police can jointly support legislation to repeal this unnecessary law.
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#16429 - 04/30/02 02:03 PM Re: BSA at the state level - Michigan
Anonymous
Unregistered

Doesn't section 5318 cover suspicious activity reporting? If that's the case, then we also are required to submit copies of SARs to the Michigan state police.

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#16430 - 04/30/02 02:42 PM Re: BSA at the state level - Michigan
Elwood P. Dowd Offline
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Elwood P. Dowd
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Next to Harvey
Everything you are required to report under BSA...including SARs.
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#16431 - 04/30/02 08:21 PM Re: BSA at the state level - Michigan
JoAnne Offline
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Joined: Feb 2001
Posts: 795
Michigan
Our BSA Officer inquired of our lead State examiner about this and he was clueless. So if the "state" doesn't even know what to do, how are the banks supposed to know. Also, has the state even sent anything out to anyone indicating mandatory compliance by 5/1/02????
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#16432 - 05/01/02 12:17 PM Re: BSA at the state level - Michigan
Bartman Offline
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Bartman
Joined: Oct 2000
Posts: 1,191
Springfield
Joanne - 'clueless' is a pretty good description. Thus far, I've heard nothing from the state police or from the state regulatory authority. The Mich. Banking Association sent a fairly cryptic message on Friday through their e-mail updates, but there were virtually no details - not even the bill number. Everything I've learned I've had to dig out on my own.

What's most disturbing is that I believe the state police are in the same box - "we have to start doing WHAT?" I'll wager that they aren't set up for the volume of CTRs coming to them starting today, either in electronic or paper media.

I'll say it again - write your congressman, raise the red flag, and let's hope wiser heads will prevail.
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#16433 - 05/01/02 12:33 PM Re: BSA at the state level - Michigan
Elwood P. Dowd Offline
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Elwood P. Dowd
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Next to Harvey
The bill's sponsors are listed in the link Bart provided. Direct your correspondence to them and the governor. Suggest you do not complain about the extra work for you, but point to the fact it is a purely duplicative effort that will never have the reliability of the existing program.
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#16434 - 05/02/02 01:17 PM Re: BSA at the state level - Michigan
JoAnne Offline
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Joined: Feb 2001
Posts: 795
Michigan
Bart - do you get the FICC News online? They sent out a CTR Alert this morning (5/2/02) and it tells where to send "paper" copies of CTRs until they decide what to do about electronic filers. If you don't get it, let me know your email address and I will forward the copy I got.

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#16435 - 05/02/02 04:24 PM Re: BSA at the state level - Michigan
Bartman Offline
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Bartman
Joined: Oct 2000
Posts: 1,191
Springfield
Joanne, thanks - bjonker@bcsbank.com. I'm an FICC member, but wasn't aware they had an online alert system.

FICC is the Financial Institutions Compliance Cooperative, set up by a group of attorneys in northern MI. Their website is www.bankersonline.ORG - and they've posted what I believe Joanne is referring to in the public section of the site, including the revised address:

Michigan State Police
Criminal Intelligence Unit
2911 Eyde Parkway, Suite 130
East Lansing, MI 48823

A tidbit from FICC's message: If you're an electronic filer, the police want paper (for now). Isn't that special?

One other note - the MBA tells me that they're meeting about this during the week of the 13th, and that the state police were essentially blindsided by the new requirement.
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#16436 - 05/02/02 06:20 PM Re: BSA at the state level - Michigan
John Burnett Offline
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John Burnett
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Cape Cod
I can't resist!

There is really nothing like a state legislature that operates in an informational vacuum!

Not that we agree with everything that goes on on Beacon Hill in Boston!
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#16437 - 05/06/02 07:28 PM Re: BSA at the state level - Michigan
Anonymous
Unregistered

Thanks for all of your threads Bart. We too have contacted several sources and everyone is totally shocked.

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#16438 - 06/28/02 08:57 PM Re: BSA at the state level - Michigan
Bartman Offline
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Bartman
Joined: Oct 2000
Posts: 1,191
Springfield
Just a quick update, from yesterday's MBA compliance committee meeting:

In short, don't expect legislative relief until the state legislature reconvenes in mid-September. They're all focused on the budget and cigarette taxes right now.

The MBA is pushing to exclude CTRs, and include only SARs - and expand the applicability to all financial institutions (as defined by GLBA).

The short-term goal is development of an MOU from either the attorney general or the state police to allow banks to hold off on sending the info for now. This would come through OFIS.

MBA plans a mini-junket to the Detroit computing center for a short list of key individuals - they hope to hammer out some resolution at that time.

Finally, it would be really cool if Michelle or another BOL administrator-type could drop this thread into the Michigan forum - while I'm kind of fired up about the topic, I doubt our colleagues from the east or west coasts are.
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