Question 1. True, unless you wish to file a CTR for every cash transaction over $10,000 with that bank.
Question 2. File the exemption. You don't have to receive cash into a deposit account to take effective possession of cash. Think about a cash loan payment over $10K. You'd report it. Think about your cash purchase from the correspondent in question 1. That isn't received into an account. Consider a currency exchange over $10,000, which also doesn't affect an account. You'd do a CTR, right?
You don't have to have an account relationship with a Phase I exempt person to designate it as exempt.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8