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#2185489 - 07/16/18 04:02 PM CD Secured Loan
mdog76 Offline
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Joined: Jan 2007
Posts: 645
When a new CD is established, then that CD is used as collateral on a loan, I've always known that to be a potential sign of money laundering according to BSA. Question is, how new must or can the CD be and still be considered "new"? Hope that makes sense.

Thank you.

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#2185497 - 07/16/18 05:03 PM Re: CD Secured Loan mdog76
bcompliance Offline
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Joined: Sep 2014
Posts: 1,252
What is the source of funds? That would be the main thing I would look at if you think that is a high risk for money laundering.
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#2185504 - 07/16/18 05:09 PM Re: CD Secured Loan mdog76
mdog76 Offline
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Joined: Jan 2007
Posts: 645
In this case, cash was brought in. What if a customer takes money from an existing Checking account and purchases the CD with those funds and that backs the CD? Would that be considered not as risky?

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#2185505 - 07/16/18 05:12 PM Re: CD Secured Loan mdog76
bcompliance Offline
Diamond Poster
Joined: Sep 2014
Posts: 1,252
Cash would be more suspicious to me than direct deposit of payroll, accumulated into an account and then transferred to a CD for collateral on a loan. But then again, what is the source of funds for the cash? Did they sell a boat or are they part of the cartel?
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#2185508 - 07/16/18 05:16 PM Re: CD Secured Loan mdog76
Richard Insley Offline
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Richard Insley
Joined: Oct 2000
Posts: 10,085
Toano, VA
You have to look at the whole picture. Where did the money in the checking account come from?
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