HIgh Risk Customers

Posted By: CC Gem

HIgh Risk Customers - 02/14/11 09:44 PM

We have always considered physicians to fall under professional service provider as far as our high risk customers were concerned. That idea is now being challenged and I am having difficulty in arguing this. I know the exam manual says, "acts as a intermediary between its client and the bank." Does anyone else consider them High Risk?
Posted By: Doug Hendrickson

Re: HIgh Risk Customers - 02/14/11 09:50 PM

They are ineligible for CTR exemption due to the fact that they are involved in the "Practice of law, accountancy, or medicine". I believe there is an implication (inference?) that they are therefore "high-risk", but would appreciate hearing from others.
Posted By: Elwood P. Dowd

Re: HIgh Risk Customers - 02/14/11 11:58 PM

Noting the language you reference, physicians, doctors, etc. very definitely do not fall under the heading of professional service provider or the slang reference, "gatekeeper." This group is made up of people who have funds in your bank that, according to your own records, do not belong to them. They are not automatically high risk, they are simply "subject to expanded examination overview;" e.g. if examiners ask you for a list of these customers you should be able to provide it.

Examples would be attorneys who have "trust" or IOLTA accounts, CPAs with "impound" funds, realtors with escrow funds, auction houses with sale proceeds, etc. In essence, you really have no idea who the money in these accounts belong to, so you darn well better know who it is that's holding the purse strings.

Being a doctor or a lawyer has little (perhaps nothing) to do with a high risk classification. The nature of the person's practice and receipts would have everything to do with it.
Posted By: rlcarey

Re: HIgh Risk Customers - 02/15/11 03:45 AM

As Ken has indicated, there are many "lists" of "types" of customers that may have inherent risks.

Take cash-intensive businesses for example. While cash-intensive business customers may be inherently high risk customers, not every cash-intensive business customer may be high risk. It really depends on the customer's specific activity and should be supported by a risk assessment associated with that specific customer. As such, not every cash-intensive business in an institution is or should be subjected to the same level of review.
Posted By: CC Gem

Re: HIgh Risk Customers - 02/15/11 04:30 PM

Thank you for all the input!