I've really been involved with BSA for more years than I want to admit, but today I'm confused about the following situation. Customer of our bank cashes $18,000 check drawn on account A. Never leaves the window, turns around and deposits the $18,000 to account B. (Both are his business accounts.) The teller says this is the way the customer wants to handle the transaction. Never mind the issues of cashing a business check......Should a CTR be completed? My first inclination is that a CTR is not required, but then I says to myself, "Self, there is a cash in ticket and a cash out ticket both of which are over $18,000, file the CTR". Someone with a clearer head, please help me out! Thanks TJ

When in doubt....file!

No CTR guru here, but - if the customer insists on conducting the transaction this way, then I would file a CTR. If each step of this transaction were performed as requested by the customer, you would have $18,000 in cash being pushed from the teller to the customer, then the same stack of cash being pushed from the customer to the teller.
Cash out from business account, cash in to personal account.

The way your system works, does the customer get quicker availability from the cash deposit? Are both account A and account B with your bank? If not, is it possible the customer is covering a kite?

TJ...If there is no physical cash, no CTR is required.

Hope this helps...

I agree with BOL User on this one- if the tellers cash drawer balance is at the same level on both ends of this customer's transactions, then there is no need to file. Someone here (John, I think) has mentioned in the past using your door as a measuring stick for CTR filing- if the cash actually enters or leaves the bank, then you need to file.

I agree with no CTR required, this transaction would be the same thing as putting the check directly into Account B without cashing it.

You do have to file a CTR there is not aggregation of funds. No ifs ands or buts about it....in my view. If the examiners come in search your cash tickets they are going to be looking for a CTR!

I would also be suspicious of this activity....a SAR may be in order!

Follow up: See the instruction on the CTR under Part II Determining Whether Transactions Meet the Reporting Threshold:

Instructions for filing a CTR

Hi Jennifer...

When there is no physical cash involved, we would note that on our CTR aggregate report. Audit is OK with it and so were the OCC Examiners. But I agree with you, it does seem suspicious.

If the cash doesn't walk through the door, then you do not have to file a CTR. Using cash tickets for these transactions doesn't make them reportable--walking through the door does. When you automate CTR filing, ALL split deposits (funds from one check split into two accounts) look like reportable events. This, too, is a false positive.

Suspicious?...SAR? For what? What crime is the customer committing by having a brief personal visit with his cash?

I don't think that fact that he doesn't walk out the door makes this a non reportable event. He could easily take that $18,000 cash and walk out. If he walked out and then changed his mind and came back 10 minutes later would that make a difference? What if he puts it in his safe deposit box? Or what if he deposits it into an account that is not for his benefit? In my opinion it doesn' matter. He recieved $18,000 and it is reportable and then he deposited $18,000 which is reportable. I would put it on the same CTR letting them know that it balanced out but I would file.

I readily admitt that I am a conservative person and I take the most conservative approach. I am always one to err on the side of caution and file the CTR.

And I am leary as to why he cashes the check and then deposits the cash. Why not just deposit the check? I am not saying that you have enough information to file a SAR at this time but I would be keeping my eyes and ears open and I would be asking questions next time he came in to do this. Filing a CTR might stop this behavior in the future because even ligitimate people don't like to have forms filled out.

Thanks for your responses. I think we'll go ahead and file CTR. Will look more closely at these accounts. I agree it could be more going on here!

Nope! I'm with Richard on this, and I'd follow his lead on most CTR/SAR questions.

If the cash left the custody of the bank (out the door or into the safe deposit boxes), that's one thing. But that isn't the case here.

Filing a CTR just to cover the cash in and cash out for audit purposes is one of the reasons that Treasury is struggling to keep up with the filing flow. What possible use could this CTR be to law enforcement?

Annotate your report that no cash changed hands, and move on.

I'm with John and Richard on this one, too. All the customer did was transfer funds, but in a way that makes it look like two transactions instead of one. And there are perfectly legitimate reasons for doing it this way: Perhaps the transfer would show on the statements as 'Transfer from/to account #####' and the customer would rather not have this info on his statements. Especially if he does not use the same bookkeeper for all accounts in question.

My bank actually created a special type of GL ticket for our tellers to use when they simply needed to suspense all or part of a transaction momentarily and then clear the suspensed item with the next transaction. Yes, cash-ins and cash-outs can also be used for this purpose, but as John observes, this practice can lead to worthless CTRs.

OK, I'll play Devil's Advocate on this one. JacFSB said:

...if the tellers cash drawer balance is at the same level on both ends of this customer's transactions, then there is no need to file.

If this is true, why do the CTR rules require you to file for cash exchanges? For instance, if I present $11,000 in coin and ask for $100 bills, you must file a CTR. The teller's drawer didn't change but this is certainly reported.

I always say "if I give you or if you give me more than $10,000 in cash, it is reported."

Rules of thumb, while helpful as training devices, are not perfect. You're right about the currency exchange, David. The cash drawer total doesn't change but the event would be reportable. The customer trips my "cash walks into/out-of the bank" test, however. In a ML scheme small bills (street money) would walk into the bank and different (large) bills walk out. This would be a reportable event because the same currency does not make the round trip.