This may seem like a stupid question, but I need to ask it.
Our internal auditor has "written-up" one of our branches as conducting "inappropriate” record-keeping related to the sale of checks & negotiable instruments.
A loan customer was in the lenders office to receive the disbursement of funds from the approved loan he was using to purchase equipment. The loan was for $9,000. He gave the lender $5,000 in cash and the lender took the cash and loan disbursement ticket to the teller window and obtained a money order for $14,000 and gave it to the customer. $14,000 was the amount the customer needed to purchase the equipment.
The Money Order / Negotiable Instrument sales log identified the loan customer as the purchaser.
The auditor says that the purchaser was the loan officer.
We tried to get the auditor to understand that the purchase was part of the transaction of the customer, no different than the customer handing the cash to the teller and the teller processing the BMO. In such a case the teller’s name would not be required as purchaser simply because she conducted the transaction, as did the loan officer in this case.

Is there any written material I can provide to the auditor to help explain this? I could not find any similar scenario/instructions in the BSA-AML Guide or the Regulation.

Please help.
Thank you

The loan officer was acting on the behalf of the bank just as a teller would be doing in processing a transaction. If that was the case, once the customer handed a teller cash to purchase a cashier's check, you would put the teller on the log.

Tell this auditor to get a grip.....

P.S. I doubt that you are going to find anything - because it makes no sense at all. I would turn the table on the auditor and say - show me....

SHOW ME.... Like it, really Like it.
Thanks Randy... Good answer... he he he he