In In February 2006, FinCEN released an Administrative Ruling addressing the proper to complete a CTR on a sole proprietorship. FinCEN views transactions conducted by or on behalf of a sole proprietorship as benefiting both the sole proprietorship as well as the owner of the sole proprietorship in his or her individual capacity. Accordingly, the CTR for a transaction involving a sole proprietorship should be completed with all available identifying information on both the business and the owner of the business.

One SECTION A should be completed for the owner using the owner's name, home address, Social Security Number or Individual Tax ID Number, occupation and ID. Also, a second separate SECTION A (using the back of the form) should be completed for the sole proprietorship business using the business's name, business address, and Employer ID Number--unless they are using the owner's SSN (then use the SSN), type of business, etc. Also, the "multiple persons" box in Item 1 should be checked.

My question is - do you complete DBA CTRs in this manner ? We have never done so.
Thanks for any input !

Yes on all sole proprietorship accounts.

This subject has been discussed to the threads and this is one of them. Please go to FinCEN Ruling R003 (Feb. 10, 2006).

I don't think Dixie Queen is debating whether it's required. I think she's trying to determine if anyone or everyone is actually complying with the new guidance.

FWIW, I conducted a seminar for approximately 60 people last week, which included BSA. I informally asked the participants if they were aware of this new guidance, if they were following it, if their examiners had mentioned it, etc. NO ONE was aware of this or following it.

I'll admit I wasn't aware of this either until today.

Currently, we are not.

I am well aware of the requirement, but have held off implementing this because it would cause even more confusion with some of our branches on how to properly complete the CTR. Some of our sole-proprietors have multiple businesses with different employees bringing in the deposits so we could end up with several Section A's and B's.

I keep hoping they will reconsider this guidance or make it easier to exempt customers, but I'm about ready to give up and put it in place before our next exam. Because we all know how important these CTRs are...

I contacted FinCEN, the DCC, and discussed the matter with our regulators (FRB). According to them we ARE to file our CTRs this way. This means our institution has some CTRs that are a couple/few pages long. Hopefully FinCEN will reverse the ruling - but until then ...

Sorry, ^^;
My answer is
yes, we do follow the guidance.

We follow the guidance, as well.

We have not been doing that either. My question though is, John A. Smith the owner's information is in the 1st Section A. In the 2nd Section A, would you do it as Smith, John A. dba John A. Smith Plumbing? According to the you paragraph it says Business name and DBA. Please help so we can inform our branches. Thanks!

David. You need to get those seminar attendees signed up on BOL. We've been b*tching about that FinCEN ruling for several months here in Bankers' Threads.

Keep spreading the word. Hopefully, folks will hear about it before their next BSA/AML exam.

I have just been politely complaining, maybe I need to take it a step up to b**'ing
And yes our bank is complying with this FinCEN guidance for about 6 months or so.

We're aware of this but not following it. Our software will not allow us to list the same SSN twice, which is often what you need to do if there is no EIN you can use. Our only choice would be to do everything manually again and since we file a huge volume of CTRs, that's simply not an option.

We use JHA's Vertex teller system and they modified their system several years ago to enable us to comply with the FinCEN requirement.

Don't doubt it a bit John. I don't think there's ever been a seminar I've taught at that I didn't mention BOL. I've even been criticized on my feedback forms for "promoting BOL too much." I'll continue to do so, because I think it's the best thing going for our industry.

I think the results from these posts may not represent the "average" bank in the U.S. I find that BOLers are much more educated than the average compliance officer. Hence, the results of my survey. I should clarify: several at the seminar were familiar with the FinCEN ruling (probably from reading it here at BOL) but not one had filed a CTR in accordance with it.

BSAdiva - Ignoring an official ruling because of software limitations is not going to buy you much in your next examination if the regulators pick up on it. It could be deemed willful non-compliance. Under the new penalty provisions - it may not be pretty.

I'm well aware of that. We've got an entire committee trying to figure out how to deal with this. I hate to think that one ruling (which doesn't even make any sense) is going to cause us to switch software providers! I'm also nagging the software provider who says that no one else has complained about this.

The FDIC just left and didn't say anything about our CTR filings and they spend a lot of time looking at them.

So basically we dodged a bullet and we've got to figure this out before they come back again.

I will reiterate David's comment based on attendees at "live" programs. People are no longer shocked when I make the point, but the compliance level is very low. From my perspective, bankers are far more aware of the interpretation than field examiners are. When the knowledge reaches the latter group they will gleefully enforce it as if it was the key to the bank's AML efforts and they may raise the issue of filing amendments...

The interpretation is at odds with common sense. The only incremental information that completion of the form per the guidance yields is the possibility of l) a second physical address and 2) an EIN if the business has one. As both the EIN and the SSN are tied to the name of the sole proprietor, it appears to be of no real value.

When law enforcement requested the interpretation someone should have analyzed the request.

Ken - In hopes that our friends from FinCEN visit this site occasionally, I will again say as I did from the beginning on this ruling that I think that it was idiotic and made without comprehension of the impact on the banking community. After the banking community at large has invested many millions of dollars to automate a required government form that has basically lost all usefulness to law enforcement, then knock them back into the stone age with a ruling that most automated systems are incapable of handling, shows a real lack of understanding of the overall picture.

P.S. I'm doing a BSA audit right now and I am reviewing IRS correspondence regarding errors on CTRS. The first thing that I noticed is that the CTRs being set back for correction are almost a year old. The second thing I noticed is that almost 75 of the corrections coming back involve data entry errors by the IRS Computing Center as the original forms submitted were correct. (I know, these guys should be filing electronically - but that is not the point).

I'll second this. We've been seeing CTR's pushed back to banks dated 1 year old lately as well. Not much help when the feedback is that delayed. I also agree that many of the CTR's are correctly completed by the bank or they couldn't obtain info and provided an explanation. IOW, the IRS feedback is wrong or useless. Sad.

I can't quote a percentage, but have heard that observation more and more over that last two years. As examiners are instructed to review correspondence regarding errors, it's important that bankers note who actually made the mistake in their replies.

If you have a software provider giving you grief over system changes, check your contract. Most contracts contain provisions for taking necessary steps to comply with regulatory requirements. If you provide the guidance and they refuse to change the system, they are in breach of contract. Just a thought, but if you want to push the issue, you may be able to provide a well worded letter from counsel on the issue as it could affect the Bank's compliance position.

That's a good idea...and it just so happens that I'm in the middle of my vendor due diligence on these folks. Probably a good time to remind them of this issue.

I'll repeat my idea again:

GET RID OF THE DAMM CTR'S. THEY ARE AN OBSOLETE DINOSAUR CREATED IN THE DAYS WHEN COMPUTERS NEEDED PUNCHCARDS TO ENTER DATA.

Replace it with a tape to tape reporting, much like we already do for credit reports. Tape to tape will simply report: Bank reporting number, customer account number, customer name, TIN, address, number and dollar amount of cash transactions in whenever it exceeds $10,000 for the month, number and dollar amount of cash transactions out whenever it exceeds $10,000 a month.

Build in a tolerance of +/- $1,000 and +/- 5 transactions to cover any weird teller system issues and then let FinCEN decide how to decipher the data. Geocode it - analyse for concentrations, compare addresses and TINs across several banks - whatever!

But this eliminates the following:
1. CTR's and voluminous manuals on how to complete the darn things.
2. Phase I exemptions
3. Phase II exemptions
4. Monitoring Phase II exempt customers
5. SARS for structing with the exception that if you see customers structing cash among several accounts to avoid the $10,000 a month trigger. (Now THAT would truly be suspicious activity worth reporting.)

Oh wait - what I am thinking - that would actually make sense and put a whole cottage industry of CTR inputters out of business.

Nevermind... G-d forbid that the government would try to cut down on waste.

I have been dealing with this for almost 6 months. FinCEN explanation to how to complete the CTRs is totally different from what the IRS says. I was told by FinCEn to put the name of the business (even if it is John Smith DBA Smith Pizza) in line 2 with all of Smith Pizza information. I just attended a webinar about BSA with BOL and received the Q & A back stating that what FinCEN told me was incorrect according to FinCEN. The explanation on the Q & A is to have John Smith and all of his information on 1 Section A and John Smith in line 2 with Smith Pizza in line 5 with all of Smith Pizza information (EIN, Address). WELL, as you can tell, I went back and fixed the ones I had to the 1st explanation. Now I have reason to believe that the CTRs I fixed are incorrect.

My question is, do I go back (over a year of CTRs) and fix them AGAIN this time with the information provided by FinCEN through the webinar?
When will it ever end?????