A Safe Deposit Box inventoried included $15,000 in US currency and 3,500 in Euros. Once safe deposit box is inventoried as per procedure, all contents including currency are sealed and maintained in bank vault. Should a CTR be filed upon inventory? If so, should the euros be converted into dollars (exchange rate at time of inventory) and reported for total US dollars?

It was not deposited or withdrawn. The fact that you removed it from a box and put it in a bag does not require a CTR.

With the same Safe Deposit Box inventoried - Would it be any different if the procedure required the US currency to be credited to a general ledger and the Foreign Currency maintained in the vault?

Nope, banks are not subject to CTR reporting

The inventory should be maintained in the form in which you found it. The renter's cash is neither a deposit nor an asset of the bank, and should not be credited to a general ledger.

And I would ask who's procedure? I know of no States that have that sort of procedure.

We placed cash found in a safe deposit box in a sealed bag with all other contents upon breakopen. Years later, when converting cthe cash in preparation for escheatment, is a CTR then triggered?

In most States you deliver the cash to the State and it is not converted - you need to start there first.

Our state does not accept cash. We spoke with them yesterday and they reiterated the requirement that they receive the funds after three years either in the form of an escheated check or as part of the wiring of funds maintained in a GL. They indicated most banks submit via check. Does the cash to check conversion trigger a CTR?

Interesting question then. Since the cash belongs to the State at the time of escheatment, I would think no as the State is exempt.

But maybe Ken or someone else has some different thoughts?

That should be the right answer--unless there's been specific guidance on this topic. State & local governments are Phase I exemptions, so all you need to know is that a state agency is directing the conversion of the cash and that state law causes the abandoned property to be owned by the state at the time of escheatment.

More on this...

I'm being told the funds are considered to be the property of the client, but being held by the state. If we issue the check at the time of abandoned property, the check will not meet the escheatment criteria because it will be dated the year it is being sent, not the year it was abandoned. The only option we have is to place it in the ledger when it is discovered (during the break open) or cut a check at the time of the break open. As placement of the funds in a ledger is turning the property over to the bank, cutting the check payable to the box owner is the best alternative. So, my apologies, but I feel compelled to once again seek an opinion as to whether a CTR is triggered!

If it is not escheated yet, how is it held by the state?

The date on the check the bank cuts would not constitute customer contact, so I do not see how that would not still meet the escheatment criteria.

Let's back up a minute, operationally speaking.

When you remit to the state for escheatment, is this done via one large cashier's check or via wire transfer? Either way you have a bunch of debits to accounts, offsets to check settlement accounts, etc. to fund the one large transaction. Your notification to the state will include whatever itemization of what is being remitted. You are not going to create a special cashier's check for this one safe deposit box.

To Randy's point, the cash should be held in a bag in safekeeping in case the owner comes to claim it prior to escheatment. To Happy's point, the teller cash in is just one of many debit entries that offset the large cashier's check or wire transfer you send to the state. This does not reset the escheatment clock on this asset.

To BSA requirements, this is not a purchase made by your customer. It is a bank initiated transaction completed to comply with your operational requirements under state law. It does not trigger a CTR or recordkeeping requirement. Simply note the circumstances behind the false positive on your cash log or automated system.