I have a customer who is not willing to provide the information necessary to complete a CTR and wants his accounts closed with cash to him. Can anyone assist on where to find the next step!

Help

Tina A Sweet-Williams
AVP/Gold Country Bank, NA
mailto:tsweet@goldcountrynb.com

Didn't you get most of the necessary information at the time the account was opened?

Assuming you do not have the necessary information from internal sources, you will still file the CTR if a reportable transaction takes place. In completing the form, write "refused" in every field where the customer will not supply the information. File the form in a timely fashion, attaching an explanatory memorandum to your file copy. (Don't attach a copy of the memorandum to what you send to Detroit, the keypunch operators there do not care.)

However, causing or attempting to cause you to file a CTR that is incorrect or incomplete is a violation of law. Follow your procedure for filing Suspicious Activity Reports.

You are also allowed under the law to refuse a transaction unless the information is supplied. You could tell the customer that you can give them a cashier's check, but if they want the cash, they must comply with the request. It appears they are leaving the bank anyway - so what would be the harm?

Thank you so much for your returns. I have contact FinCen and they stated that refusal of the transactions was appropriate. However, I would like to find out where you received you answer in regards to the "refusal" of information. And to answer your questions in regards to retrieving the SSN at opening, no they did not and the account was opened many years ago.

Tina A. Sweet-Williams
AVP Compliance Officer
Gold Country Bank NA
mailto:tsweet@goldcountrynb.com

My statement that the law allows you to refuse the transaction may have been a little strong. However, a FinCen Ruling (2000-1) indicates:

In general, a financial institution must (i) make a reasonable and good faith effort to obtain the information necessary to complete a CTR; and (ii) evaluate the reasons why such information is not available or provided during the transaction. The currency transaction reporting provisions do not necessarily require a financial institution to refuse a transaction if all of the information required for the completion of the CTR is not available or provided by the transactor; the decision whether to accept or reject a given transaction rests solely with the financial institution and should be made based upon a number of facts and circumstances unique to each transaction.

I guess I would not take the chance and subject the bank to criticism or second guessing by the regulators. We refuse any transaction that requires a 4798 to be filed if the person refuses to provide the required information.

Tina- It's been a VERY long time since you could open an account without making an effort to obtain a TIN. You may also want to check & see if this customer has been included on your "no TIN list" which is a related recordkeeping requirement.

Since the customer was closing accounts, I failed to consider the possibility that the bank could "decline" the transaction. rlcarey's answer is narrower and the better of the two. Following his approach, the bank is not actually declining the transaction, the customer is being allowed to close its accounts. Instead, the bank is declining the method of disbursement requested because the customer will not comply with the identification requirements. That works.

We would still have a problem if, after receiving a cashiers check for his funds, the customer put it back on the counter and wanted cash for it. There are only a few reasons a bank can refuse to pay its own cashiers check. Being uncertain of the payee's identity is one of them, but it is clearly not available here because we just let this person close an account in the same name. The fact that a bank cannot always decline a transaction is why there is no specific requirement to do so.

There isn't anything form FinCEN that tells how to complete a CTR when the customer refused to provide information and it's unlikely that there ever will be. They acknowledge that it's a possibility, but do not want to create a road map that too many people would follow. Nevertheless, banks do conduct reportable transactions with insufficient information. If the institution has no legal choice but to conduct the transaction, it needs to leave a trail showing that it made the appropriate inquiries. The purpose of the file memo is to have something to offer in response to a an inquiry from Detroit or on-site examiners.

My answer was overly broad and should have included a caveat that it only applied when the bank had no choice but to conduct the transaction. My apologies.

Just to let you all know. The customer indicated he was going to take us to court. He contacted his attorney who swiftly told him "He would be wise to provide the information requested" So as it is we have all the information required for the account and the CTR. I thought you all might enjoy a good note.

Have a great weekend!

We have a little different twist to this scenario. I have a local organization who has deposited more than $10,000. The teller completed the CTR and attempted to obtain the information required for Section B from the individual conducting the transaction. This person refused to provide us his Social Security Number. Does anyone have a recommendation for future transactions? Thanks.

Contact the chief financial officer of the organization and advise that your bank will not accept future deposits of reportable sums of cash unless runners comply with your requests for ID. Mention that there are severe penalties for failing to file complete and accurate CTRs--if worded effectively, this advice can suggest that the customer faces the penalties.

Just to add some grist to this mill -- On the flip side is the customer who wishes to purchase a bank check with cash (cash amount $3,000 or more and $10,000 or less). In these cases, if the person transacting refuses information you must record to comply with the recordkeeping requirement for cash purchases, the reg says you MUST refuse the transaction.

John,

Thank you for the information, but to let you know, we were refusing the transaction and he finally went to his lawyer so said to him "You had better give them what they want" so in the short story. We have all the information we need now, and on file.

Thanks to everyone for your responses.