I am just full of questions today. Would the purchase of gift cards with cash in amounts of $3000 - $10000 inclusive need to be recorded on a log, like what we do for negotiable instruments?

The requirements for recordkeeping relating to cash purchases of negotiable instruments are found in 31 CFR Part 103, section 103.29, which is entitled "Purchases of bank checks and drafts, cashier's checks, money orders and traveler's checks." Gift cards are mentioned neither in the title nor in the text of the rule.

FinCEN has proposed that BSA/AML requirements be made applicable to certain issuers of "prepaid access." I believe that banks are not covered.

There are no bank record retention requirement for prepaid access cards sold for currency. (As noted, they do not meet the definition of a monetary instrument.) In my opinion, it's a flagrant oversight because they are far more useful to money launderers and terrorist financiers than negotiable instruments ever were.

Many banks voluntarily impose restrictions on their sale to non customers and daily minimums maximums on the aggregate dollar amounts they would sell per customer. They also voluntarily impose record retention requirements parallel to those the regulations impose on the sale of monetary instruments.

Their rationale is more akin to citizenship rather than compliance.

Let me add this. If suspicious activity is noted, the bank would be required to report. Therefore, banks develop methods to identify suspicious activity in sale of gift cards.

Also - review your contract for gift cards. I have seen contracts by which the bank has agreed to check OFAC on all gift card sales - and has no idea it contractually committed itself to this requirement.

I know I am bringing up an old thread, however, I found it while searching for an answer, so here goes.

Since a gift card is not considered a negotiable instrument, if there is a cash purchase of VISA gift cards and it needs to be reported on a CTR, which bucket would that transaction fall into?

Nevermind.... in my initial panic of "this is not a normal transaction," I failed to remember that there is now a "bucket" for Cash In Prepaid Access. That will be the bucket I put this transaction into.

Sorry!

How about 25f?

Newbietoo - can your core system do a monthly query, for example, using the specific tran code for gift cards? We started doing that this year. Our tellers have a special "hot key" they use when processing gift card transactions and it captures if cash was used or not, the amount, date, along with purchaser name and their checking or savings account they have with us--along with amt of fee, branch, time, etc. Sure made it easy for us.