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#2118002 - 02/13/17 06:21 PM Phase II Exemption Documentation
Wildcat Rampage Offline
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Joined: Aug 2016
Posts: 95
Kentucky - Home of the 8 time ...
I am putting together my documentation for continued Phase II exemptions for the first time. I have a system generated report that shows Cash-In for the customers and totals it with the account number, TIN, and name. Is that information sufficient OR do I need to print (to PDF) a copy of the specific transaction that would include the cash-in ticket and the deposit slip (bear in mind that for many of these the customer may have brought a dozen or more smaller cash "drops" to make the reportable cash transaction)?

Thanks in advance.
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#2118012 - 02/13/17 06:50 PM Re: Phase II Exemption Documentation Wildcat Rampage
bcompliance Offline
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Joined: Sep 2014
Posts: 1,294
We use a spreadsheet that lists the days in which a reportable transaction occured - as long as you can prove it happened over 5 times I think it would be ok. Don't forget that you need to determine if they are still eligible for exeption (is their business license still active, are their ineligible activities less than 50% of their gross revenue, etc.)
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#2118014 - 02/13/17 07:02 PM Re: Phase II Exemption Documentation Wildcat Rampage
Wildcat Rampage Offline
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Posts: 95
Kentucky - Home of the 8 time ...
Thank you.
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#2118252 - 02/14/17 09:52 PM Re: Phase II Exemption Documentation Wildcat Rampage
CynthiaParker Offline
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Joined: Apr 2006
Posts: 45
Midwest
As bccompliance noted, the annual review should include more than verifying that enough cash transactions took place. Everything you verified when you exempted the person should be verified in the annual review of Phase II exemptions. You would want to document that the account(s) are reviewed/monitored for suspicious activities (hopefully none were found), that they are in good standing under U.S. or state law, that enough qualifying transactions have taken place, and if they offer any prohibited business lines, show documentation that less than 50% of gross annual revenue is derived from those business lines. Are you verifying what accounts are open and under exemption, have any new accounts been opened? Do you compare cash activity from the prior year with the current year to detect unusual or unexplained fluctuations? If you document the percentage of revenue that comes, from example, lottery sales - can you show how you reached the number?
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#2118489 - 02/16/17 05:04 PM Re: Phase II Exemption Documentation Wildcat Rampage
P*Q Offline

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If you're interested in a form, PM me and I'll send you ours. I use to it to document my annual reviews.

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#2119013 - 02/21/17 08:39 PM Re: Phase II Exemption Documentation P*Q
GrannieTwo Offline
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Posts: 180
Central IL
My experience with our Fed examiners in IL. I have an excel spreadsheet listing all customers who have deposited or withdrawn over $3000 in cash in one day. We have one business that almost every weekend's (Friday night, Saturday, Sunday business) deposit on Monday is over $10,000. I sort this excel spreadsheet to show all of the deposit dates, amount etc. by EIN. Last year they had 33 times they were over $10,000. The examiner made me supply her copies of every months statement showing these deposits. Did I tell you 33 times. I don't get the paper reduction act because all I do is generate paper. Sorry, I was just reading about the comment period for the new and improved SAR and I'm frustrated. The narrative says it should take a person two hours to complete a SAR. I have spent two days, trying to get a SAR right. If someone out there in BOL land can give me a tip on how to reduce my time to just two hours, please let me know. Sorry again, just frustrated.
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#2119014 - 02/21/17 08:49 PM Re: Phase II Exemption Documentation GrannieTwo
Elwood P. Dowd Offline
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Elwood P. Dowd
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Posts: 21,939
Next to Harvey
Quote:
Last year they had 33 times they were over $10,000. The examiner made me supply her copies of every months statement showing these deposits.


If your file already contained copies of 5 deposit slips and cash-in tickets (or the equivalent records), the other 28 were gravy; i.e. they were completely irrelevant to proving eligibility.
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#2119017 - 02/21/17 08:52 PM Re: Phase II Exemption Documentation Wildcat Rampage
John Burnett Offline
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Joined: Oct 2000
Posts: 40,086
Cape Cod
A good examiner would review your spreadsheet and check a number of items to gain confidence you had the information correct by pulling up statement images rather than having you print the all out.
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#2119018 - 02/21/17 08:53 PM Re: Phase II Exemption Documentation Elwood P. Dowd
GrannieTwo Offline
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Joined: Nov 2010
Posts: 180
Central IL
To make sure I understand, I should really be printing off deposits until I get to the five. I guess I'm thinking, more paper, but that's what I'll do. Thank you.
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#2119023 - 02/21/17 08:59 PM Re: Phase II Exemption Documentation Wildcat Rampage
bcompliance Offline
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Joined: Sep 2014
Posts: 1,294
You could keep the first five tickets as proof. I did that at the last bank I was at, but they had prior BSA issues, so the examiners wanted concrete evidence I knew what I was doing. At my current bank, examiners did what John suggested. They pulled a sample from our spreadsheet and asked for documentation of our review. From there, we gave them our checklist of how we determined they were still eligible and they were ok with that (never looked at a deposit ticket).
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#2119026 - 02/21/17 09:04 PM Re: Phase II Exemption Documentation Wildcat Rampage
GrannieTwo Offline
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Joined: Nov 2010
Posts: 180
Central IL
I appreciate your suggestions.
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