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#2101697 - 10/04/16 08:20 PM Opinion on Travel Rule
Buddy the Elf Offline
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In our most recent internal audit, we received a finding because our wire room sends more than just the actual transmittor on wires from joint accounts. For example, if John and Jane Doe are both on the account and John requests the wire, we'll send both John and Jane as the Originators. The transmittal order would be signed by John since he was the one who requested the wire. Internal Audit is saying that only John is allowed to be on the wire to comply with the Travel Rule.

Our interpretation is that yes, John must be on the wire, but if Jane is on there as well, it's of no consequence. The Travel Rule says that the transmitter must be included but it doesn't state that others on the account must be excluded.

Internal Audit is pointing to question 15 of the Q & A which states that, “In all cases involving a transmittal of funds from a joint account, the account holder that ordered the transmittal of funds should be identified as the transmittor on the transmittal order.” However, it does not specifically state that additional transmittors are prohibited from the wire transmittal as it travels. We are unable to find any further guidance which references joint accounts.

We intend to call FinCEN for an opinion but I was wondering if anyone had experienced anything similar and could offer any input.
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#2101716 - 10/04/16 09:04 PM Re: Opinion on Travel Rule Buddy the Elf
rlcarey Online
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The transmitter is the transmitter. The account number associated with the transfer is a separate issue.
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#2101749 - 10/05/16 10:35 AM Re: Opinion on Travel Rule Buddy the Elf
Elwood P. Dowd Offline
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So, your auditor is critiquing you for including all parties to the account as the transmitter(s) rather than just one of them? From your side of the desk my response would be: "You want to talk about this? Seriously?

First, what exactly is the problem? It's certainly not a BSA compliance problem so put some sort of descriptive label on it that is not dependent on your personal preferences.

A check written on a joint account usually discloses the names of all owners regardless of which one signed it. A wire cannot do the same? The guidance acknowledges that more than one person can be listed as the transmitter. Is your interpretation that they all have to come to the bank together or that they both must be on the phone when the wire is called in? Should we inquire as to the specific purpose of the wire and make an independent determination of whether it benefits both parties, or just one of them?

Second, if a bank is required to keep records and transmit information, it is pretty easy to make a case for including all available information in both instances. There are parallels in how cash deposits and withdrawals are handled for CTR filing purposes; i.e. none of them reflect a preference for not including all owners on joint accounts. If I have a joint account with Oliverio Abril Cortez, but you only put my name on the wire because I'm the one who called it in there may come a time when someone critiques that decision.

My written response would be that we found no legal or practical basis for the criticism and had no intention of revising our practices.
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#2101796 - 10/05/16 02:15 PM Re: Opinion on Travel Rule Buddy the Elf
Buddy the Elf Offline
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Yes, Ken, we seriously had to talk about it for approximately one hour. Not only that, if we do decide that we disagree with the finding, we have to note it as a "risk acceptance" and outline all of our reasons. Besides everything you said, which I completely agree with, I can't figure out how our practice contains any risk whatsoever. Thanks for the feedback. Appreciated as always.
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#2101828 - 10/05/16 03:23 PM Re: Opinion on Travel Rule Buddy the Elf
edAudit Offline
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You are here
"risk acceptance"

Can you have them point to the additional risk?
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#2101870 - 10/05/16 04:32 PM Re: Opinion on Travel Rule Buddy the Elf
Buddy the Elf Offline
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I got the following response from FinCEN:
The travel rule indicates the bare minimum requirements to satisfy the rule. Information on the joint account owner that initiates or orders the transmittal of funds must be included in the transmittal order. The travel rule does not list any limitations that would prohibit a financial institution from including information on the other joint owner(s) on the account that the funds are being transmitted from.

We intend to have Internal Audit remove the finding. Thanks for your thoughts!
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#2102010 - 10/06/16 10:12 AM Re: Opinion on Travel Rule Buddy the Elf
Elwood P. Dowd Offline
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"Risk acceptance" would be an accurate label only if you had taken their advice. wink
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