Thread Options
#2131166 - 05/19/17 04:49 PM Requiring purpose on wire transfers
J_G Offline
100 Club
Joined: Dec 2010
Posts: 219
Is it standard to require the purpose for outgoing wire transfers? I am trying to implement this policy. I'll need to explain the importance of this information to management, but also... how do other banks handle situations in which the customer doesn't want to provide us the purpose? What should our stance be on that? Other than NOT sending the wire, are there any other good options? I should mention we are a very small community bank. I'm anticipating a little push-back. Having the purpose of outgoing wires would be so helpful when doing monitoring for suspicious transactions.

Return to Top
BSA/AML/CIP/OFAC Forum
#2131170 - 05/19/17 05:04 PM Re: Requiring purpose on wire transfers J_G
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
No, it is not common for community banks to require a statement of purpose for outgoing wire transfers unless it is driven by their geography; e.g. greater Miami.

The reasons to do it:
* it's easy and, I am told that if customers get a heads up about the new requirement and are told its non negotiable, there isn't that much pushback and it eventually goes away,
* it helps identify people who might be suspicious, i.e. those who would object to the requirement,
* it's helpful to receiving banks in identifying wires which might be fraudulent; e.g. it's unlikely this New York apartment dweller sold a tractor,
* it's fundamental due diligence information that explains what may be your customer's largest transactions,
* if you always ask for it then you have good cover for asking for it when you really don't understand what the customer is doing,
* some countries require it,
* some correspondent banks require it.

To me "required" means "required;" no statement of purpose, no wire. This isn't like paying a check, your bank is under no obligation to send a wire.
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top
#2131260 - 05/19/17 10:48 PM Re: Requiring purpose on wire transfers J_G
ACBbank Offline
Power Poster
ACBbank
Joined: Jul 2006
Posts: 4,138
New York City
How many investigations are related to outgoing funds transfers at your shop? Of those, how many require RFIs? Normally smaller banks don't require this, but if you see a large number of investigations are requiring RFIs related to outgoing wires, it may be a way to become more efficient for those investigations.
_________________________
"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu

Return to Top
#2131618 - 05/24/17 12:14 PM Re: Requiring purpose on wire transfers J_G
banker1976 Offline
Gold Star
Joined: Nov 2005
Posts: 344
Mid-Atlantic
We implemented requiring wire reasons on outgoing international wire transfers at the start of this year. Our only push back was from the wire transfer department. Branch staff, management and administration did not have objections. Needless to say, the new procedure was implemented and the wire transfer department now knows that a reason is required for outgoing internationals and if there is no reason, the wire is not sent. We even have tellers who will get reasons for outgoing domestic wires (which is really helpful sometimes), but we only require it per policy and procedures on outgoing internationals.
_________________________
CAMS
CAFP

Return to Top
#2131795 - 05/24/17 07:55 PM Re: Requiring purpose on wire transfers J_G
Complycated Offline
100 Club
Joined: Aug 2013
Posts: 155
We are a very small community bank and just started asking for a purpose for all outgoing wires last fall. There was grumbling until we prevented a customer from wiring $5,000.00 to her "friend who was stranded overseas". (Of course she had never met the person, but they had been talking online for a few months so it had to be legit!!) It was a perfect example of how doing your basic due diligence can pay big returns. We don't get complaints about it anymore.

Return to Top
#2131799 - 05/24/17 08:10 PM Re: Requiring purpose on wire transfers J_G
Beachbum, CRCM Offline
Gold Star
Joined: Dec 2006
Posts: 482
Knee Deep in Regs
Our correspondent bank informed us last year that outgoing international wires will not be accepted without a purpose. This made it easy for us to require the purpose on international wires without push-back. At this time we do not require the purpose in outgoing domestic wires.
_________________________
What we think, we become.
Buddha

Return to Top
#2132824 - 06/02/17 12:40 PM Re: Requiring purpose on wire transfers J_G
bhazzard Offline
100 Club
Joined: Dec 2010
Posts: 114
We are a fairly large community bank, with a decent volume of wire transfers. We have required a purpose for outgoing wires for years now. We recently noticed some pretty vague purposes and partnered with our wire department to require additional information if the purpose if not descriptive enough. The wire will not be sent unless we are comfortable with the purpose. This has helped extremely in our BSA investigations, and has prevented numerous "romance," or other wire scams!

We did receive some pushback but once fully explained our staff understood.

Return to Top
#2132997 - 06/02/17 09:25 PM Re: Requiring purpose on wire transfers bhazzard
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Quote:
and has prevented numerous "romance," or other wire scams!


Many find this indirect benefit more tangible than the ones I listed. I'll take it however I can get it!
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top
#2133328 - 06/07/17 03:22 PM Re: Requiring purpose on wire transfers J_G
TryingtoComply Offline
Diamond Poster
Joined: Apr 2013
Posts: 1,882
The West
My favorite purpose description is "personal." smile

We need to recognize that customers will fall into certain categories. Some will feel obligated to provide the information needed. Others will question the need for the information. Front line staff should be trained on how to respond to questioners. Once they understand the "why" they are usually more willing to provide the information.
_________________________
TryingToComply
CRCM

Return to Top
#2184285 - 07/06/18 01:50 PM Re: Requiring purpose on wire transfers J_G
Fitz Offline
New Poster
Fitz
Joined: Apr 2010
Posts: 9
Wilson, NC
So, there is no regulation requiring the need for purpose of wire transfer (either domestic or international)?
_________________________
While money can't buy happiness, it certainly lets you choose your own form of misery.
Groucho Marx

Return to Top

Moderator:  Andy_Z