Cash Transaction Information

I have a CEO who has no interest in allowing me to train tellers to ask source or purpose of cash transactions and feels it's "an invasion of privacy." Further, he wants to see a procedure drawn up with quantitative limits on asking questions from customers. And, would rather us send letters from the Compliance Office for cash transactions instead of making it customary at the teller line. I vehemently balked at this and told him by the time I see the transaction, the ship has sailed. Further, tellers can help prevent fraud and loss (like our customer last week who was scammed out of $5,000 for a used car that she gave them cash for then went back to the line for more cash to pay the balance). I was also informed that whatever limit I set, he will raise.

I'm trying to find out if other FIs have such procedures and what internal thresholds get set to get a basis of what I tell him (realizing I will be shot down). I also did inform him that we will become the "easy target" for fraudsters, face reputation risk, and fines and I told him that regulators won't take naivety as an excuse.

Any help is appreciated.

I kind of get where he's coming from with the limit, because you don't want tellers asking people where they got $10 from. But, since he told you he's going to raise the limit, didn't he just give you a reason to purposely set a lower limit?

Seems like some training on why this stuff is important would be useful for your CEO, so that he can see why you're wanting it done and maybe even participate in developing some guidance around when to ask/what to ask, etc.

Might be worth tracking any losses you take that could have been avoided by asking questions so that you can show him a dollar amount that naivety is costing.

Thanks MScarn. I did mention that I'm not interested in the small dollar stuff and that these tellers have been trained annually for years to be asking questions. Currently, they have been instructed to around $3,000. But I had a $12,000 where the teller didn't even think to ask. He says, "so what if we file a SAR?! It just goes to a black hole anyway." He doesn't think I'm relevant or important. I'm just a "because the examiners make me." And, further, he doesn't understand the amount of work that goes into a SAR investigation, 90 day follow-up and ongoing monitoring, especially given that I'm a one-woman manual shop.

It sounds like you need to educate him on the requirements, your current process, and an ideal process that would help you comply with the regulations and speed up your investigations (ex. asking for the source of funds over $3,000 for cash deposits). SARs are actually very helpful to law enforcement when they provide useful information. Not asking customers' questions about unusual transactions is a nightmare scenario for AML investigators because you are playing a guessing game.

Definietly educate him and give examples where SARs would not be required if questions are asked. Someone coming in and withdrawing $9,500.00 cash may seem unusual but when you find out that they are purchasing a car in private sale it makes sense. This can also be used as a sales tool as frontline can find out if customer is looking at purchasing vehicle or doing updates on home which could lead to HELOC. usually once you mention a sales opportunity in it they come around.

I did have a similar situation at previous bank but it involved wires. We trained staff to ask about cash transactions $3,000.00 and above with no issue. We wanted to put purpose for wire on the wire form and the Accounting Manager and the CFO decided it would be optional since people had the right to do what they wanted with their money. They both missed the point which was somewhat surprising as the accounting manager had even dealt with a customer sending out suspicious wires when I first got into BSA. The accounting manager and I did not get along so I knew the only reason he went to CFO about it was because I was the one that suggested adding the line onto the form. Sometimes its a lack of training on management end, sometimes its spite.

It may help to re-review the CDD Final Rule with your CEO. Despite the fact that all the focus is on beneficial ownership, it's not the Beneficial Ownership Final Rule.

Banks are expected to understand and reasonably predict the types of transactions their customers will engage in. For example if, based on your risk assessment, you expect that your consumer customers may reasonably be expected to deposit $10,000 in cash per month, you don't need to give extra scrutiny to those transactions that are below that. If it goes above that amount, suddenly it's not what you predicted, and may warrant additional questions if the source isn't self-evident based on the customer's occupation. If you're in a HIDTA or HIFCA, maybe $10,000 is too high? I would start with $5,000 because that's the SAR filing threshold, and see how frequently your customers are exceeding that.

It may also be worth making the case that if tellers are asking at the time of the transaction, the bank is much more likely to get a response than if a letter is being sent out. Again, if you profile and say that $10,000 is reasonable, and then have unanswered questions about a $11,000 deposit, what then is your recourse? A SAR for unusual cash deposits that also indicates the customer was asked for the source and "refused" to answer? Asking in the form of friendly conversation seems worthwhile to avoid needless and ultimately worthless SARs being filed.

It's a lot harder for a customer to ignore a teller's question than a letter with that same question. The letters will get tossed by most customers.

You may also want to suggest that the CEO review the FinCEN guidance on the culture of compliance.

Thanks all. I'm quite frustrated by the situation since this is apparently a change in the process and not in a good way.

Agreed, but now I'm curious... how do you train tellers to press more when they get ignored by a customer? When I was a teller, we were supposed to ask things like "oh did you win the lottery?" or things like that to prompt an answer, but never really told what to do if the customer didn't come forward with the actual source.

If it happens frequently with the same customer they inform their manager and the manager discuses with the customer. They are trained more in depth on how to handle those situations.

be sure to pass on any examples of BSA enforcement actions to your senior management team