CTR issues with new ATM

Posted By: mzachau, CRCM

CTR issues with new ATM - 10/03/11 10:33 PM

We are in the process of purchasing and implementing a new ATM to meet ADA laws. Our old ATM did not accept deposits, however the new ATM will.

Our vendor is telling us that it will cost $15,000+ to program the ATM software to identify the difference between cash and check deposits. If no programming was to be performed, we would not be able to determine whether the deposit was cash, check, or combination of both.

Is there an exemption under BSA that would not require us to have an ATM that could identify cash transactions for CTR reporting purposes?
Posted By: Elwood P. Dowd

Re: CTR issues with new ATM - 10/04/11 01:08 PM

There is no legal requirement that a bank must have a system for aggregating cash transactions. There never has been. However, it would be nigh on to impossible to audit BSA compliance in the absence of such a system, so they are a regulatory expectation at least.

Regardless, no bank has a "perfect" system that aggregates cash "by or on behalf of the same person" at every possible portal. As no system is required, there are no "exemptions" for the portals that are missed in one system compared to another.

What might be helpful to you is to hear from other bankers whose ATMs cannot recognize the composition of a deposit as to whether their reviewers thought that was a significant shortcoming. To sit through such a criticism, I would have to hear someone pointing out instances where the amount of currency we missed was significant.
Posted By: edAudit

Re: CTR issues with new ATM - 10/04/11 01:24 PM

How are you going to process the deposit transaction?

If by envelope, the cash would be processed by the teller system and cash will show as regular cash.
Posted By: ACBbank

Re: CTR issues with new ATM - 10/04/11 01:29 PM

Originally Posted By: EdAudit
How are you going to process the deposit transaction?

If by envelope, the cash would be processed by the teller system and cash will show as regular cash.


That's how we do it.
Posted By: John Burnett

Re: CTR issues with new ATM - 10/04/11 03:47 PM

And that's how we did it 10 years ago. We had branches notify us whenever an ATM deposit included more than $500 cash. It was pretty rare (ATM deposits were about 1% of our ATM transaction counts). When we got a report, we checked to see what else the customer did that day.
Posted By: mzachau, CRCM

Re: CTR issues with new ATM - 10/04/11 05:26 PM

Thank you all for your comments and recommendations. Envelopes will not be used when depositing cash and/or checks into the ATM.

Our expectation is that deposits at the ATM will be very rare and that is why management is asking if there are alternatives. My concern though is that even if someone were to deposit over $10K in cash at the ATM, the system would not differentiate between cash or check and we would just see one big deposit. Even though this will probably "never" happen, examiners are not in a "understanding logic" mindset!
Posted By: ACBbank

Re: CTR issues with new ATM - 10/04/11 09:10 PM

Ok, I'm confused. CTR issues aside, if someone deposits cash into an ATM and you can't tell its cash, how can it be credited appropriately to the account?
Posted By: BetsyS

Re: CTR issues with new ATM - 10/07/11 05:53 PM

The deposit is actually an EFT credit initiated by the customer at the ATM with their card & PIN. They key in the dollar amount and select the account to be credited if they have access to more than one account with their card. Depending on the ATM, typically they then place the cash or checks into an envelope and deposit it into the ATM.

On the back end, the credit is settled with some type of sequence number which can be matched to the sequence number on the envelope deposited in the ATM so the transaction can be verified. Our ATM also prints the dollar amount keyed in and the cardholder's number on the envelope. And yes, they don't always match and we have to make an adjustment to the cardholder's account.
Posted By: John Burnett

Re: CTR issues with new ATM - 10/07/11 07:10 PM

I think the point here is that, eventually, your bank knows the contents of the deposit and whether and how much cash was involved. That knowledge needs to make it from the ATM deposit settlement area (a branch or a central point that opens and processes the envelopes) to whoever aggregates cash activity to determine whether a CTR is warranted.