Would a monetary instrument log be required for each of the scenarios (transactions occurred on different days)?

Scenario 1: A Phase II exempt customer deposits $40,000.00 in cash to an exempt account. Same day, an Official Check is purchased from this exempt account for $7,000.00.

Scenario 2: A Phase II exempt customer deposits $40,000.00 in cash to an exempt account. Same day, an Official Check is purchased from this exempt account for $27,000.00.

Any "exemption" you recognize is solely for the purpose of currency transaction reporting.There are no exemptions or exclusions from the requirement to keep records regarding monetary instrument sales.

And welcome to Bankersonline

Thank you for your response. Yes for both scenarios. As we thought.

Based on FinCEN CTR FAQ #30 and since a monetary instrument purchase cannot be exempted from CTR reporting for Phase II entities, I believe an argument could be made that scenario 2 would require a CTR since the monetary instrument purchase exceeds $10,000. The monetary instrument recordkeeping requirements only apply to sales between $3,000 and $10,000 inclusive. I recommend a call to the FinCEN Helpline to confirm whether or not they want a CTR filed for scenario 2.

"Banks may implement a policy requiring customers who are deposit accountholders and who want to purchase monetary instruments with currency to first deposit the currency into their deposit accounts (while treating this two-step process as one transaction). Nothing within the BSA or its implementing regulations prohibits a bank from instituting such a policy. Therefore, if a customer purchases a monetary instrument using $15,000 in currency that the customer first deposits into the customer’s account, whether at the requirement of the bank or at the customer’s discretion, the financial institution would complete Part I of the FinCEN CTR with the customer’s information. In Part II Item 25, the financial institution would indicate $15,000 as cash in for Item 25d “Purchase of negotiable instrument(s)” as shown below. Completing the FinCEN CTR in this manner will notify law enforcement that the currency was used to purchase a negotiable instrument."

I agree with Brian, reluctantly. FinCEN's clear intent in FAQ #30 is that there be a CTR for a cash purchase of a monetary instrument such as a cashier's check, even if the cash first makes its way into the purchaser's checking account. For scenario #2, I'd suggest filing a CTR as Brian has described it.

If the customer in scenario #2 were NOT exempt, I'd suggest filing a CTR reflecting a cash deposit of $13,000 and the cash purchase of the cashier's check for $27,000, for a total transacted on behalf of the customer of $40,000.

Plus, businesses can't purchase a MI with cash. Only an individual can for MI recordkeeping purposes.

Update from FinCEN - Scenario 1: Complete MIL, Scenario 2: No MIL, No CTR