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#1939971 - 07/11/14 06:17 PM banks as Phase I status-urgent!
Trees Offline
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Employee of the bank goes to a teller to obtain some fees, in cash, for board members. Employee also makes a withdrawal for a board member, as a favor.. All trans. reported for tax purposes, as required. This is not the issue. So, total that the employee walks away with is $10,250. We filed a SAR on the employee.

It is now being suggested that the fees are bank related, and therefore, the transaction for the fees, should they ever go beyond $10,000. should be exempted. I say not.

We need some assistance with our argument, or, if you agree with this new interpretation, please advise this to be the case.

I didn't know that transactions that can be construed as bank related and being performed by bank employees, are exempt from CTR reporting.
Thanks.

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#1939986 - 07/11/14 06:30 PM Re: banks as Phase I status-urgent! Trees
edAudit Online
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I am confused

What type of fee?"Employee of the bank goes to a teller to obtain some fees, in cash, for board members"


If the fee (?) is for a board member and not the bank how can it be exempt?

Why a SAR
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#1940069 - 07/11/14 07:27 PM Re: banks as Phase I status-urgent! Trees
John Burnett Offline
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Hypothetical response to EdAudit:

Executive Secretary to Bank CEO brings a debit to G/L to tellers for fees to be paid in cash as directors' fees at tomorrow's board meeting. That's done on behalf of the bank, IMHO. No CTR. In fact, there's no change in control of the cash. It was the bank's cash before and it's still the bank's cash. No transaction.

When the cash is distributed at the board meeting, it's another transaction, on behalf of the individual board members. And it's the bank that is doing it, whether it's being handed out by the CEO, the Chairman, the Exec. Secy or the janitor. Unless one of the board members gets more than $10K in cash, there's no CTR.

I'm going to bet that Trees meant to type that the bank filed a CTR, not a SAR.

Do I think it's ever a good idea to pay directors fees in cash? No.
Last edited by John Burnett; 07/11/14 07:28 PM.
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#1940070 - 07/11/14 07:29 PM Re: banks as Phase I status-urgent! Trees
Trees Offline
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Didn't file a SAR. Filed a CTR. My error.

It is being argued that board members are employees of the bank, that the transaction is for bank business and therefore should be exempted.

Fees are for monthly board fees. Paid in cash as a convenience.

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#1940071 - 07/11/14 07:30 PM Re: banks as Phase I status-urgent! Trees
edAudit Online
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That would make sense.

Most of the fees paid to directors that I have seen has been as a wire transfer. I did not even think of a possible cash payment to them. The SAR thew me off.
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#1940074 - 07/11/14 07:31 PM Re: banks as Phase I status-urgent! Trees
BrianC Offline
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Hypothetical response to John:

I agree that director fees should never be paid in cash. So why would a bank do it?

Heaven forbid the directors are paid via check and are all asked for ID by the new summer help when they attempt to cash their checks.

The very people tasked with ensuring the safety and soundness of the bank having a fit when the bank attempts to follow its procedures to do exactly that. I've been in my share of small institutions...
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#1940086 - 07/11/14 07:46 PM Re: banks as Phase I status-urgent! Trees
John Burnett Offline
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Answer to Brian: A bank might pay directors fees in cash as a convenience. Sort of like the way my old bank used to pay holiday bonuses in cash (before they were significant amounts). Sort of like the way my first bank employer used to pay its payroll in cash. We'd get paid twice a month, but we were never really sure if payday would be on the 15th or 16th, so we would watch for Ellen, the Cashier, to put her head together with the head teller and get a bundle of new cash. But to my mind, convenience should take a back seat when it comes to things like payroll and directors fees. Direct deposit (to a bank and account of your choice, of course). Check as an alternate.
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#1940219 - 07/11/14 09:20 PM Re: banks as Phase I status-urgent! Trees
Trees Offline
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Hmmmmmmm. So, my employee getting over $10,000. in cash and walks away with it, and then distributes it to the various board members does not meet the requirements for a CTR. Make sure John & Co. because I have been filing CTRS on the rare occasion where the amount taken from the teller window is in excess of $10,000.
For my peeps, I can say this is bank business, right?

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#1940512 - 07/14/14 06:00 PM Re: banks as Phase I status-urgent! Trees
J2C Offline
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Why would you file a CTR if you know the transactions are on behalf of the bank?

It seems common sense that if you know what this is for and a bank is exempt under Phase I that you wouldn't file.

Perhaps direct deposit would remedy these concerns along with any others.
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#1940538 - 07/14/14 06:26 PM Re: banks as Phase I status-urgent! Trees
HappyGilmore Offline
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Pulling people out of the ditc...
if this isn't classifed as bank business, i don't know what is. Likely this falls under the old "we've always done it like this" and no one has questioned it...but now you have, so you can remedy this moving forward.
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#1940747 - 07/14/14 09:06 PM Re: banks as Phase I status-urgent! Trees
Trees Offline
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years ago we asked a consultant about this and they advised us to file the CTRs. Not many were filed. Probably a couple a year fall over $10,000. We will adjust our procedures.

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