If a client privately contracts with an armored car company to pick up currency deposits from their business location, who then fine counts the currency at their cash vault location and electronically submits credits to the Bank who further credits the clients account, how should the transaction be recorded on Part II of the CTR? Should it be reflected as a "Cash-In Deposit" or may it be reflected as "Cash-in Other"?

"Electronically submits credits to the bank"

Sorry if I missed something but if there is no cash going to the bank then you don't file a CTR.

I disagree. We have knowledge that the deposit was cash. The client is simply engaging a third-party to facilitate the deposit.

https://www.fincen.gov/resources/statute...d-cars-currency

towards the bottom may be of some help

FIN-2013-R001 supersedes FIN-2009-R002. Regardless, neither provides granularity around how Part II should be completed. In my mind, these are always deposits or withdrawals, so why would they be recorded any different regardless of a third-party's (ACS)involvement?

call fincen and ask them their preference

I would think that you would also want to understand how the cash transactions are handled by the armored car company. I have seen some companies that collect cash from businesses actually file currency transaction reports on the customer's transactions. It sounds very similar to your situation because the cash is deposited into the account of the company collecting the cash and then is forwarded via ACH to the account of the business. It is a difficult situation in that there is no value in reporting the transactions twice; however, you want to ensure that the transactions are reported. After hearing of this situation, I often wondered how the institution who is banking the business would analyze the relationship from a BSA/AML perspective since those ACH transactions are actually cash deposits facilitated through a third party. Thinking about it actually makes my head hurt. If you do reach out to FinCen and get some resolution, please share with us!

Do you really need to file in this situation though? I haven't dealt with this situation, but what makes it reportable?
No currency has been transacted through the bank.

Your agreement with the third-party should indicate who is responsible for filing CTRs.

Regardless, as thomasj indicated, these customer's ACH transactions for monitoring purposes should be considered to be cash, not ACH transactions. These may be cash intensive customers and you will not have a clear picture of their activity without considering these transactions.

You might want to research if you can establish a specific trancode for the transactions so they are easily identified.

Some examiners are know about these arrangements, so be careful. Many customer on this type of service are cash intensive, so you will want to monitor their transactions.

I think the challenge with the arrangement that the original poster described is that the customer has contracted with the vault service, not the bank. I would think that either the vault service or the financial institution where the vault service deposits the cash would be responsible for filing a CTR but it would be something that would have to be verified by the institution receiving the ACH credits. Does the cash go into an account established for the customer at the financial institution receiving the cash deposits or is the cash aggregated along with other customers of the vault service and credited to the account of the vault service? There are a lot of questions that need to be asked.

I'm not trying to be dense here, but I still don't understand why these would be reportable transactions for the bank.

There's no currency being physically moved through the institution, which is what I've always said was the trigger. How does an ACH become currency and therefore a reportable transaction to your bank?

because the FINCEN guidance says it does...

I always hesitate when a response is "because so and so says so".

If you read FIN-2013-R001 carefully, that is talking about currency withdrawals or deliveries of actual currency by the ACS on behalf of the customer. If the cash never makes it to or from the bank and this is totally an arrangement by the customer between them and the ACS and all that is happening is the ACS either sends an ACH withdrawal to or ACH deposit to the bank, the bank does not have a CTR reporting responsibility. Now since the bank is aware that these transactions likely involve cash, it should go into the banks analysis for SAR consideration, but the bank's responsibility ends there. If this was an arrangement between the ACS and the Bank, then it would be a different story.

certainly understand, but the question was "why?" And whether we agree with it or not, FINCEN does say so in the FIL, so that is the answer at the end of the day.

Without further information on how this all works - then FINCEN FIN-2013-R001 may not even apply.

I think that communication is the key to this entire situation. The opening sentence of the original post states that the customer has privately contracted with the armored car service. I think I would start with obtaining a copy of the agreement the customer has signed with the armored car company and having a discussion with the customer. Hopefully there would be language in there pertaining to the filing of currency transaction reports. If the contract is between the customer and the armored car company, reaching out directly to the armored car company is likely not going to go far without your customer's cooperation. If your institution had contracted with the armored car service to collect the deposits, this issue may be different and you might have better insight as to your filing responsibility.

If the cash is being deposited to an account belonging to your customer at another financial institution and then forwarded to you via ACH, I think it's pretty obvious that the other institution would be filing CTRs. I think that a more likely scenario would be that the cash is being aggregated with other businesses and deposited to an account at the other financial institution belonging to the armored car company and then the amounts of the cash deposits (possibly less a processing fee) are being forwarded to you via ACH. I have seen situations like this where the armored car company is processing CTRs on behalf of the customer, how comfortable you are with that is up to you; however, I don't see how you would or if you should file CTRs based on the ACH transactions. Duplicate filings or filings with incorrect amounts are not productive.

I think that beyond the CTR conversation you should address the potential AML monitoring issues this could create and the possible limitations you might have in adequately assessing the risk presented by the customer (automated systems, impact on reports, EDD reviews, etc.).

So I've read through the FIL and all of the discussion regarding filing seem to discuss pick up and delivery of currency which correspond to withrawals and deposits to a customer's account.

Is it footnote 5 which talks about "or other value that substitutes for currency..."?