We have a few customers which have privately ownded ATMs at their location of business. The majority of these customers have complied with our requests for documentation and segregating funds and opening a seperate account for their ATM activity. However, we have some "older" relationships where they refuse to do this. And our front line managers don't want to lose the relationship as there aren't any problems with the customer. The customer simply does not want to open a seperate account since they already have the deposits from the ATM activity going into their general fund account and don't want to change. I can understand this - and most of them use "funds from the business" to replenish the ATM. There is no state law that requires the business to establish a seperate ATM account. If we have performed due diligence and the customer has told us everything we have asked regarding the ATM activity - haven't we done all we can do? Anyone have any thoughts on this? It's very frustrating to walk the line of meeting the customer needs/serving the customer - and doing what we need to do from a BSA / AML standpoint.

IMO there is no need to require a separate account, unless your policy requires it.

I would think you're fine - but I would put a "grandfathered" clause in your procedures to state any account opened prior to "X" ... etc ... etc ...

We have the same issue with some older accounts. We require a seperate account for the activity now. How else will you know that you arent seeing money laundering when they refill the ATM?

The ATM usage is easy to identify by the daily ACH credits, and this is true whether there is a separate account or the ATM activity is in the general account of the customer. Then depending on the level of ATM usage and your due diligence on the customer, his business, and overall activity, you would either expect cash withdrawals for all or part of the ATM usage or if the usage is low you can reasonably believe that the ATM is replenished all or in part by the customer's cash receipts. To me, to always require a separate account is not necessary.

We have a scenario where a convenience store customer services an ATM at their store and they are withdrawing the cash at our bank to replenish the ATM, but the ATM processor credits are going into their account at another bank (our bank allows this). As a bank, do we collect the documentation (e.g., copy of ATM processor contract) from this customer?

If the customer was only renting space for the ATM and the tenant was servicing it, the contract would suffice. Since the customer is servicing the ATM, the expectation is that you will monitor the activity. If the account is not at your bank it's unlikely you will meet that expectation.

As for requiring the customer to maintain an account, banks hold the carrot as well as the stick. You can give them a free, ATM dedicated account (much easier to review) or, if they don't like it, charge them a fee for reviewing the ATM activity going through their general account.

Or just tell them to get their cash from the other bank........