What you have is a great example of a policy conceived for the right reasons, but with unintended consequences. Policies should not be written in ways that unnecessarily get in the way of legitimate business. This policy should have included wording to allow for purchases by or on behalf of a customer. In that way, you'd still have to obtain personal information on the individual making the purchase to complete a cash purchase record or CTR (if necessary) but you would not be in violation of your own policies.

This is something most banks have not thought of. When writing policy they think of theor "customer" purchasing the check, not someone on behalf of a corporate customer, hence getting tangled in "violations".

So at what dollar threshold would you recommend we gather MIL information on a non-customer, who purchases on behalf of a business?

Is there a best practice? I'm willing to definitely write it into my procedures, but $3,000? $1,000? $1?

I would not be concerned unless it qualifies as a cash purchase of a monetary instrument under 31 CFR 1010.415 or triggers a CTR. In the former case, the individual is the purchaser of the check, and in the latter, he or she will be the conductor of the transaction.

What about agreggation? Non-customer goes to one branch, does $2,000, then goes to another branch and does $2,000. (<-- yes, I know, would be suspicious)

or

Non-customer goes to the same branch and does $2,956.24 & then forgets they needed another one for $100 and comes back later.


Sorry - I realize this is all speculation, but the original question opened a can of worms & to my delite ... most of these questions have been posed to me by the branches.


& I'm just too tired to think.




I'm thinking I'm going to set the limit at $3k to gather info & just risk it & get on with my day.

It's unlikely that legitimate purchases will be split up over different branches or at different times of the day. But obviously there is an opportunity to structure multiple purchases such that they would not be recorded under 1010.415. If you're concerned about that, you should select some dollar amount below $3000 at which you would benefit from aggregation. Clearly, $1 is way too low, as is $100. But perhaps $1000 makes sense for you. But you should understand that some individuals will take exception to your asking for their personal ID information at levels that are lower than what they know or you can document triggers the record keeping requirement.

But you should understand that some individuals will take exception to your asking for their personal ID information at levels that are lower than what they know or you can document triggers the record keeping requirement.

Considering we are talking abut non-customer, if they don't like it tell them to go down the road. Personally, I just as soon say no sales to non-customers and be done with it.

The problem revolves around cashier's checks bought for cash on behalf of a business that is a customer when the individual isn't. Policies need to allow for that sort of thing, IMHO.

I agree, John. Customers cannot be expected to check what employees have accounts with their bank to send folks on errands. It makes no sense at all and is not what banks are thinking when they say no sales to non-customers.

Well, I am of an opinion that a legitimate business handing an employee or someone else at least $3,000 in cash to go down to the bank and buy a cashier's check on behalf of the business (and indicating the business as the remitter on the check) would probably not be considered a wise or necessary business practice. Such transactions usually get my SAR antennae wiggling. I started a review on just such a transaction at a bank in around 2001 which lead to the uncovering of a huge commercial loan fraud that brought down this specific bank. If a business wants to be shown as the remitter of a cashier's check, then they should write a check or have the bank debit their account. I doubt that any typical corporate or other resolution obtained by banks authorize anyone to act in this capacity for the business.

Many banks state that they will not sell cashiers to non-customers, period. They are not specifying for cash necessarily, just a blanket prohibition on any sale.

I like this topic but I want to bring in another angle. John Doe is a contractor. He is not a customer. Our customer, James Smith pays Doe with a bank check for $25,000. Doe presents the check to cash it. he asks for $5,000. in cash and 4 official checks for $5,000. each, all payable to him. he leaves with the checks and cash. over the next two weeks he cashes the checks, one by one, by coming to the bank and presenting them for the cash.

Ihave always hated tehse types of transactions. And, we get mixed opinions on whether or not we should file a SAR. If son, for what reason?

There could be legitimate reasons the contractor wants to take the cash in smaller chunks -- perhaps he will be acquiring material for this or the next job over time. Maybe he just doesn't want too much cash readily accessible. If you believe such is the case, I don't think this is SAR-worthy. But if you get the sense that the contractor's sole purpose for taking the cash in smaller pieces is to avoid a CTR filing, or perhaps believe the contractor is attempting (by cashing the check rather than depositing it) to evade income taxes, file a SAR.

Perhaps John is more understanding than I but I would certainly file a SAR for this activity. Also, you could have refuseed his request in the first place if your policy is that you don't sell monetary instruments to non account-holders.

Oh, what a dream that would be however, we don't sell them outright. In the case described, however, we do allow people to walk out with official checks rather than take all cash. Its a very hard issue for us, deciding if this type of activity is Sar worthy. I see your points, John. We feel pressured, once again, to file SARS at the drop of a hat, or close, rather than think things through, obtain some clarification, etc. There seems to be unwritten "guidance" (best practices0 that we file a SAR for any activity that barely smacks of evading taxes. I would be curious if others are feeling that way....

Sorry John I am with devsfan.

If there was a ledgit reason for the cash the contractor would deposit the check in his own bank and take the cash as needed. For some strange reason he wishes to avoid a money trail that his accountant can see.

If you have another reason that a "reasonable" regulator will find acceptable don't file.

My only concern is if your customer is a suspect (but that is another story).

Don't ever apologize for an honest difference of opinion. And it's clear that in discussions like this one, nuances are often brought in from other directions that enrich the discussion and inform our participants.

Happens all the time. Welcome to rural America where people actually trust eachother. Yes there is risk of fraud anywhere - but the risk is typically very low if you know your customer.

We say "check for check", or all cash. A non-customer can't have splitsies.

(unless "all cash" would deplete our branch or non-customer starts discussing safety concerns, at that time they have to get my approval. I have the exception ability written into policy).

Oh. believe me, I am fully aware that is happens all the time. But the fact of the matter is, the bank has no obligation or requirement to get involved in such an issue with or without proper authority grant by the business.

Just to add another wrinkle ... our customer comes in to get a cashier's check, but make some non-customer the remitter. We sold the cashier's check because our customer is paying for it. It came to light when responding to a subpoena for that particular check and we said "who is this remitter" because it was not our customer. Teller did not think they were selling to a non-customer. So we need to make sure that our customer isn't just being a straw person for a non-customer.