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#599601 - 08/15/06 07:47 PM
Toying with the idea of a Phase II exemption...
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Power Poster
Joined: Mar 2005
Posts: 6,298
San Diego, CA
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So, my BSA mentor at the OCC suggested I might want to consider exempting one of the bank's frequent CTR filers, just to try it out, see how it works, learn....etc.
I have decided on the customer, a sole prop, who would be the best to exempt and matches all the requirements for an exemption, not to mention I have been to the business several times and the volume of cash is very legitimate.
Doign this iwll make more work for me, but I will learn in the process and broaden my knowledge. What are y'all opinions on this? Is it worth it? Any tips on gettign started?
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Dabbling in banking, law, accounting...the life of a trustee.
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#599602 - 08/15/06 09:51 PM
Re: Toying with the idea of a Phase II exemption..
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10K Club
Joined: Oct 2000
Posts: 10,180
Toano, VA
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- First you compute the cost of filing one additional CTR for the proposed exempt person.
- Next, you estimate (based on past filing frequency and your expectations for the business' cash sales) the number of CTRs you expect to file during a typical year.
- Next, you determine the number of hours required to document the exemption plus the maintenance hours spent training, auditing, recertifying, and defending this exemption.
- Next, you estimate the total cost of filing CTRs (estimated annual number X cost per item) and the cost of creating the exemption (# hours X fully loaded cost of staff and management time.)
- Finally, you compare costs and ask yourself whether the potential savings are worth the hassle and additional risk.
Unless you expect to save A LOT of money, spend your time on something that has a better risk/reward ratio.
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...gone fishing.
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#599603 - 08/15/06 11:22 PM
Re: Toying with the idea of a Phase II exemption..
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Power Poster
Joined: Mar 2005
Posts: 6,298
San Diego, CA
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...even though FinCEN says to exempt as often as we can?
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Dabbling in banking, law, accounting...the life of a trustee.
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#599604 - 08/15/06 11:56 PM
Re: Toying with the idea of a Phase II exemption..
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10K Club
Joined: Jul 2001
Posts: 83,350
Galveston, TX
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"...even though FinCEN says to exempt as often as we can? "
Richard forgot to make sure you factor in possible fines when you screw up your Phase II exemption process or the cost of going back several years and back-filing. I have yet to visit a bank that has had Phase II exemptions and not identified at least one problem that caused the bank to perform, at the very least, back-filing. Some of these banks have very talented staff and overall good programs, but one detail or another can get you.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#599608 - 08/16/06 02:54 PM
Re: Toying with the idea of a Phase II exemption...
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Platinum Poster
Joined: Aug 2006
Posts: 516
Ohio
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I agree with Jennifer, especially if you have quite a few that you can exempt. We have exempted almost 20 Phase II customers, which has definitely saved time and money for the bank. However, if I was at a bank that was thinking about Phase II exemptions for the first time and there was only one or two that were eligible, I'd be hesitant on exempting them. Like the others said, you have to consider the cost and risk involved in your situation.
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#599609 - 08/16/06 03:28 PM
Re: Toying with the idea of a Phase II exemption...
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Gold Star
Joined: Jul 2002
Posts: 325
Texas
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We recently Phase II Exempted those repetitive customers we file CTRs on. ALthought the documentation requirement is there, we actually cut our CTR filings by almost 40%.
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