At my bank, we require all negotiable instruments to be purchased with a debit from their account. We do not sell negotiable instruments to non-customers. We recently had a BSA audit that stated that even if our customer deposited the cash into their account, we should still be logging those on our negotiable instrument log ($3K-$10K) because even though technically the payment was made by a debit from their account, the customer's intent was to pay for it with cash.

Does this sound right to anyone else?

We're thinking about changing our process where we no longer require the customer to deposit the cash into their bank account and just pay for the negotiable instrument with cash. This makes my radar go off but I don't know if it's because that doesn't sound right or if it's because it's changing the way we've done it for 20+ years.

Any help/guidance is appreciated.

It has been a requirement since 2002: https://www.fincen.gov/sites/default/files/guidance/monetaryinstrumentsales3a.pdf

Is there any point in having the customer deposit the cash into their bank account and purchase the negotiable instrument with a debit from their account? It seems like an added step.

I am not aware of any benefit to depositing the funds first unless your system has no good way to reference the purchaser of the instrument.

We require customers to deposit the cash first. That allows the core system to properly link the cash to the customer within our BSA/AML software. Otherwise, the BSA/AML software thinks the deposited cash is linked to the bank, since it "deposited" into an account belonging to the bank.

We also require a deposit first, this is how the transaction gets linked to our customer, core system, and transaction monitoring system. We would catch it for MIL purposes looking at our cash reporting log every day.

This it is easier to track with your AML software unless they can link it by TIN or other means.

Thank you, All!