We recently updated our core teller platform to capture the conductor for all cash transactions regardless of dollar amount. I'm wondering if anyone else who has instituted this policy, or a similiar policy, would be willing to share their experiences (negatives and positives), size of institution, location, etc. We've received mixed feedback from our customers, and want give them a positive customer experiences while meeting our regulatory commitments. Please feel free to PM me.

Chase did this voluntarily months ago because they recognized significant amounts of funneling due in large part to their geographic footprint.

Why did your bank do it?

I'm not trying to challenge, just point out that this tactic is on the verge of being over used by banks that are trying to stay ahead of the curve when there is no curve. Establishing an internal threshold of, say, $3,000 and then requiring ID may be justifiable. However, carding the Dad who wants to put $200 in his daughter's account is a ridiculous imposition in most banks where funneling is a practical impossibility.

We began doing this in order to aggregate transactions based on conductor. This was not a proactive move, but rather reactive based on criticism from our regulators - OCC. Since implementation in late October we have seen CTRs generate based on conductor aggregation that we would have missed in the past.

One of our biggest challenges has been around exempt customers and whether or not to ask them for ID. Another challenge is explaining to our customers that we have this new requirement, when there isn’t new regulation or law to backup this requirement.

If you are talking about phase II exemptions, I hope your customers don't know that they are exempt. At Chase you can simply purchase a cashier's check and deposit it into the account. Some tellers advertise this, but it clearly goes against the AML thought process.

I'm sorry, but I have to ask why you say that? All of my exempt customers know they are exempt. There's nothing prohibiting the bank from informing the customer. In the past, I've had some exempt customers complete and sign a form letter indicating what percentages of their sales come from activities like lottery sales, etc, for further documentation that they are eligible.

I found that to be an interesting statement also.

At some point, someone got the idea that CTR Exemption was as confidential as a SAR filing.

It's not.

Now there is a red flag if you open a new account and the depositor immediately requests to be exempted. That's one of those "Hmmmm...." moments.

If you were to file a SAR on your client and remove them from the exempt list, how would you explain to your client that you are no longer exempt? Another reason I personally wouldn’t disclose this to customers is that some may try to abuse their exemption and bring in funds through their accounts that’s unrelated to the business. Perhaps I’m a little cautious...

Out of curiosity, how many more CTRs are you seeing? In other words, is the difference substantial or a few outliers here and there? And what was your previous minimum for capturing conductor identifying information?

We are seeing an additional 3-10 CTRs a day due to this enhanced aggregation. On average we file 4500 CTRs a month.

Previously we didn't capture conductor at any dollar amount, unless of course a CTR was required.

Creating an ID threshold of any amount below $10,000 will increase the number of CTRs filed and the amount of detail included on those that would have been filed anyway. The issue is simply whether there is any incremental value in the "extra" filings and "extra" information. There is no basis for assuming that more is better...

As noted, there is absolutely no reason why a customer should not know they have been recognized as an exempt person. In many cases, banks need their cooperation to get the extra information required. Banks requiring ID from persons whose transactions are not subject to reporting regardless of the amount could be subject to justifiable insults from their customers. As for how to explain to a customer why you took them off your exempt list: "We are not required to recognize any customer as an exempt person; we decided not to recognize you as an exempt person anymore." The answer is simply not a problem. It's the question the bank should be focused on.

You don't have to tell them about the SAR. If they ask, repeat the phrase "The Bank hasmade a decision" until your face turns blue. If you would like further guidanceon how to handle the conversation, review Bill Belichick's press conference following the early season loss to KC ("We're on to Cincinnati").

On another note, if you are more concerned about how to handle the logistics of revocation and SAR filing than obtaining exemption due diligence from a customer, you shouldn't be exempting them in the first place.