If a customer paid off a loan with $8900 cash one day and two days later paid off two other loans with $8500 cash, would you consider that structuring? We clearly see the purpose of each transaction, but could we consider that the customer potentially was still trying to avoid a CTR?

Unless you know why they had $27K+ in cash just hanging around - absolutely.

The Loan Officer says the cash was a gift from his mom to payoff the note. Would this change anything?

Just because we conclude the source of funds is legitimate does not change the fact that the payments were structured.

Right - Moms hand out 259 hundred dollar bills all the time to children - yeah - that is believable.

Sorry about the confusion, but he split the $8500 cash to payoff the 2 other loans. So it was $8900 one day and $8500 two days later for a total of $17400. So if the source of the funds and purpose are legitimate, can these transactions still be viewed as structuring?

From FFIEC BSA/AML Manual:
"However, two transactions slightly under the $10,000 threshold conducted days or weeks apart may not necessarily be structuring. For example, if a customer deposits $9,900 in currency on Monday and deposits $9,900 in currency on Wednesday, it should not be assumed that structuring has occurred. Instead, further review and research may be necessary to determine the nature of the transactions, prior account history, and other relevant customer information to assess whether the activity is suspicious. Even if structuring has not occurred, the bank should review the transactions for suspicious activity.

If mom gave him cash (and did not write him a check?) why did he not pay off all the loans at the time same time? Why did he not deposit the cash and write checks for the loan payments. It doesn't matter where the cash came from for structuring to have occurred. But saying the cash came from his mom is even more suspicious.

This is a classic case of structuring.

That was one of the questions I was struggling with, why didn't he pay them off at the same time? But from my quote from FFIEC BSA AML manual, 2 transactions just under $10k, days apart, should not be assumed as structuring, and recommends reviewing the nature of the transactions, which to appear legitimate.

For this particular case, we don't see the mom giving him cash as suspicious. We are located in a small town, know a lot of our customers personally. This customer's parents are also bank customers, dad owns an autobody shop. Customer has a small disability, so the idea of his parents helping him with money is completely reasonable in our opinion.

In cash? - you mean Dad filtered a bunch of cash out of his autobody company to hide income and gave it to the son to launder it for him? Nobody in their right mind hands someone that much in cash.

You can try any argument you want, still it smells like a classic case of structuring. File and move on - you are not the judge or jury. Or - you can try and argue your way out of being cited for not filing by an examiner - your choice.

Which brings us back to Randy's question that even if this were plausible, (which I also doubt) why wouldn't mom have given him all the cash at once?

What is a legitimate reason for a $9,900 cash deposit on Monday and a $9,900 cash deposit on Wednesday? I could see a car dealer selling two cars for cash on different days (and my research would involve requesting copies of invoices.) I had an ATM owner where the cassette could only hold $10,000 so the owner would withdraw $9,000 at a time when the cassette was almost empty. (My research included the documented specs of the ATM and my site visit to the location). A restaurant owner had an insurance policy that stated they would not be covered if they were robbed while carrying more than $10,000 to the bank. (My research was a copy of the insurance policy.)

Your research consists of the customer's statement which is not nearly as concrete as the documentation I describe above. That level of investigation is the intent behind the FFIEC comments.

I see structuring in this thread and a banker looking for a legit reason not to report it. I will only offer this -- it's a lot less stressful to file (you don't need to prove there was structuring; you are reporting what you believe to be suspicious. The fact that you're asking for advice suggests you know it's suspicious (not necessarily purposeful structuring).

To paraphrase someone wiser than I, it's a lot easier to file the SAR than to explain why you didn't when challenged by an auditor/examiner.