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#1728861 - 08/08/12 07:03 PM Unregistered MSB SAR Threshold
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As required we have been reporting unregisterd MSB's. But, have a question as it relates to SAR thresholds. Are we required to report ALL unregistered MSB's or only those who meet the threshold of $5,000 in MSB transactions per quarter?

Does anyone have a reference that covers this?

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#1728863 - 08/08/12 07:04 PM Re: Unregistered MSB SAR Threshold Compliance Nut
CantBeShocked Offline
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I report all - and I just use current transactions captured by my AML software (we e-file via the software) and I have also filed them with a zero dollar transaction.
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#1728871 - 08/08/12 07:14 PM Re: Unregistered MSB SAR Threshold Compliance Nut
Elwood P. Dowd Offline
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Your federal functional regulatory agency's SAR filing regulation and FinCEN's regulation [1020.320(a)(2)(ii)] say the same thing.
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#1728881 - 08/08/12 07:18 PM Re: Unregistered MSB SAR Threshold Compliance Nut
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I'm confused, when you say drop the "per quarter" what do you mean. We review MSB's on a quarterly basis. It has always been our understanding that we need to file on unregisterd MSB's each quarter. Are you disagreeing with that? Also, are you saying that we should or should not use a $$ threshold for filing MSB's?

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#1728883 - 08/08/12 07:19 PM Re: Unregistered MSB SAR Threshold Compliance Nut
Elwood P. Dowd Offline
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For better or worse, sometimes you wake up in the middle of the night realizing you made a mistake. Note the time of this mea culpa.

If a customer cashes a check or checks in excess of $1,000 for a person on any given day, it becomes an MSB. If it sends a wire transfer for one of its customers, it becomes an MSB. There are more triggers. However, when one of those triggers is pulled, failure to register is a violation of the Bank Secrecy Act and is reportable on a SAR without strict regard to the $5,000 threshold.

Based on recent guidance, reviewing the activity 90 days after the end of the period covered by the first SAR would support a bank's responsibility to file a continuation SAR if the MSB activity continued. If one of the MSB triggers was pulled in that 90 days a continuation SAR would be necessary regardless of whether the amount involved exceeded $5,000.

Arbitrarily tying the filing of continuation SARs to a quarterly MSB review will not work unless the first SAR just happened to cover a period that ended on the last day of the preceding quarter or the bank files the second SAR before the end of the first 90 day review period.

For example, assume a bank does its MSB reviews at the end of each calendar quarter. Assume too that it recognizes an unregistered MSB and files a SAR for the period ending April 20, 20XX. (The next required review period would end 90 days after April 20.) In order to force the activity into its quarterly filing regimen, the bank would have to file the second SAR for the period ending June 30, earlier than otherwise required.

My apologies for my first responses.
Last edited by Ken_Pegasus; 08/09/12 07:01 AM. Reason: Correct response
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#1729487 - 08/09/12 09:26 PM Re: Unregistered MSB SAR Threshold Compliance Nut
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FinCEN called me back today. On this subject they said "The financial institution is to a SAR for MSB actvity found on non-registered customer's accounts but are NOT obligated to if below the filing threshold for SARS.

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#1729515 - 08/10/12 12:00 AM Re: Unregistered MSB SAR Threshold Compliance Nut
rlcarey Offline
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So a MSB has to register by Jan 1 if it is a renewal or prior to starting operation if they are a new business. For a check casher, to be considered a MSB you have to cash checks for more than $1,000 a day for a customer. Once they do that, how many days cashing checks does it take to reach $5,000? Since continuing SARs go back to day one, you have to continue to file. So their advice is rather worthless.
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#1729539 - 08/10/12 11:34 AM Re: Unregistered MSB SAR Threshold Compliance Nut
Elwood P. Dowd Offline
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Cashing a single check in excess of $1,000 makes your customer an MSB and, if they do not register, your bank is required to file a SAR. However, for the following 90 days the ante is increased to $5,000 worth of the same activity before a continuation SAR is required?

Sending wire transfers for their customers makes your customer an MSB and, if they do not register, your bank is required to file a SAR. However, for the following 90 days they don't become an unregistered MSB requiring a continuation SAR unless they send $5,000 in wires?

That's the answer I too gave initially, but then went back and changed it because I realized it was ridiculous.
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#1729597 - 08/10/12 01:58 PM Re: Unregistered MSB SAR Threshold Elwood P. Dowd
Elwood P. Dowd Offline
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I called the Helpline and attempted to fully disclose the situation. After conferring with senior personnel, their employee indicated that the $5,000 threshold would not apply to initial or continuation SARs on MSBs in the circumstances set out above. They are going to notify their Helpline personnel so their future responses on this point are homogenized.
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#1730109 - 08/13/12 03:18 PM Re: Unregistered MSB SAR Threshold rlcarey
Ted Dreyer Offline
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Quote:
So a MSB has to register by Jan 1 if it is a renewal or prior to starting operation if they are a new business.


I'm not sure that's true for new businesses. Section 1022.380 of the FinCEN regs says: "The registration form for the initial registration period must be filed on or before the end of the 180-day period beginning on the day following the date the business is established."

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