Thread Options
#2148834 - 10/05/17 04:41 PM "Nibbling" Cashier's Checks and Policy
Wildcat Rampage Offline
Member
Joined: Aug 2016
Posts: 91
Kentucky - Home of the 8 time ...
I have a scenario and a question please.

First the scenario.

Jane Doe brought a cashier's check in the amount of $36,000 from another bank into one of our branches last April. She used that to get $9,999 cash back, a $2,500 cashier's check made payable to her son, a $2,500 cashier's check made payable to her daughter, and a cashier's check for the balance (we'll say $21,000 for brevity) made payable to herself. Every red flag I own went off, so I track the cashier's check to Jane Doe.

In July Ms. Doe comes back with the $21,000 cashier's check. She gets $3,000 cash and another $18,000 cashier's check.

Now she has come back again in October with the $18,000 cashier's check she obtained in July. She once gain gets $3,000 cash and now a new $15,000 cashier's check.

I think this is suspicious. I also think it's at least potential or consistent with attempted structuring. However, my boss thinks that because "it's only $3,000" and "it's three months apart" that it's not structuring. So, I told her I would ask some experts for their opinions. I know the opinion that people use cashier's checks as defacto savings instruments. Is that the way I should look at this instead of my pessimistic view that the customer who took $9,999 originally is engaged in structuring?

Policy Question -

I'm not a fan of allowing anyone to "nibble" cashier's checks by getting some cash and a new cashier's check for a smaller amount. I want to change our policy to reflect that unless we are unable to cash the check, that we will not allow this practice. In essence, I want our policy to say that a person's choices are to either deposit the cashier's check or cash it. My boss (management) doesn't really like that idea. So again, I'm left to ask others - is that extreme? Is that common? If you have that policy at your bank, how do you have your frontline staff explain it to customers?

Thanks in advance.
_________________________
Wildcat basketball isn't a matter of life and death, it's much more important than that.

Return to Top
BSA/AML/CIP/OFAC Forum
#2148838 - 10/05/17 04:46 PM Re: "Nibbling" Cashier's Checks and Policy Wildcat Rampage
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,598
Galveston, TX
Give management this document and then ask them again how they would like to proceed:

https://www.justice.gov/usao-sdwv/pr/us-...red-funds-first
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2148862 - 10/05/17 06:13 PM Re: "Nibbling" Cashier's Checks and Policy Wildcat Rampage
Wildcat Rampage Offline
Member
Joined: Aug 2016
Posts: 91
Kentucky - Home of the 8 time ...
Thanks Randy. I actually HAVE given that to them in the past, and that's where the disconnect lies.

They see $10,000 and understand. They don't see $3,000 and think there's a big deal. They say, "people use it as a savings account". They say, "she's only getting $3,000 every 3 months".

**My intent isn't to be disrespectful, I appreciate your assistance. I think the disconnect is that management wants more of a risk-weighted blend that makes customers happy and I want a black and white approach that makes it easier for me to manage the risk.
_________________________
Wildcat basketball isn't a matter of life and death, it's much more important than that.

Return to Top
#2148877 - 10/05/17 07:09 PM Re: "Nibbling" Cashier's Checks and Policy Wildcat Rampage
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,598
Galveston, TX
OK - then try the tactic of what is in it for the bank - other than the potential for the regulators to come down on you like a ton of bricks. If the customer wants a savings account - then open one so the bank has an opportunity for fee income. If not, then there should be a hefty charge for the issuance of a cashier's check under this circumstance. These are most likely not customers worth anything to the bank - whether they are happy or unhappy. Most likely they want the money off the grid for some reason - legal - illegal - who is to say, but don't make the bank complicit in their activities.

If that doesn't work - then just say OK - you did your best to warn them.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2148885 - 10/05/17 07:32 PM Re: "Nibbling" Cashier's Checks and Policy Wildcat Rampage
bcompliance Offline
Diamond Poster
Joined: Sep 2014
Posts: 1,228
If that doesn't work - then just say OK - you did your best to warn them.

and keep your email/memo where you explained this to them in you CYA file
_________________________
CRCM, CAMS

Return to Top
#2148959 - 10/06/17 12:09 PM Re: "Nibbling" Cashier's Checks and Policy Wildcat Rampage
Wildcat Rampage Offline
Member
Joined: Aug 2016
Posts: 91
Kentucky - Home of the 8 time ...
Thank you.

If I am successful, how do I coach the frontline staff to tactfully explain to the customer that we can no longer allow her to nibble the cashier's check? Or to explain to other customers that we won't allow them to nibble? Does anyone have a "magic speech" that sounds good without making the person who hears it think they're being accused of anything?
_________________________
Wildcat basketball isn't a matter of life and death, it's much more important than that.

Return to Top
#2148977 - 10/06/17 01:14 PM Re: "Nibbling" Cashier's Checks and Policy Wildcat Rampage
edAudit Offline
Power Poster
edAudit
Joined: Jul 2008
Posts: 4,728
You are here
Yes in the past we used a simple phrase:

"We do not exchange checks"

These people are usually not customers if they were you could deposit and reissue.
_________________________
Opinions can be considered as coming from anywhere but my employer.

CAMS


Return to Top
#2148978 - 10/06/17 01:16 PM Re: "Nibbling" Cashier's Checks and Policy Wildcat Rampage
edAudit Offline
Power Poster
edAudit
Joined: Jul 2008
Posts: 4,728
You are here
Actually I believe that it is an easier discussion than having one with the regulator on why the transaction is not suspicious.
_________________________
Opinions can be considered as coming from anywhere but my employer.

CAMS


Return to Top
#2149340 - 10/10/17 09:23 PM Re: "Nibbling" Cashier's Checks and Policy edAudit
Cape Codder Offline
Gold Star
Joined: Jul 2011
Posts: 413
Wildcat, we previously had this problem and resolved it by requiring that the cashier's check must be deposited to their account; They can then withdraw available funds in cash or for the purchase of a new cashier's check. Makes for a much better audit trail, easier to detect structuring, and the "nibbling" has stopped.
_________________________
Nothing difficult is ever easy.

Return to Top

Moderator:  Andy_Z