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Can We Disclose We Want To Exempt a BSA Customer

Our financial institution has implemented a policy of requesting financial information to assist in ascertaining whether a customer may be exempted from currency transaction reporting. We were told that we cannot explain to the customer why we are requesting this information. Is this true or mis-information?If we can tell a customer that we are filing a CTR on them, why would we not be able to explain to them that we are requesting information on their business to help us determine if they are eligible to be exempted?

Answer by David Dickinson: I know of no specific regulatory guidance on this, but I would try to avoid telling the customer that you want to exempt them.


Answer by John Burnett: I respectfully disagree with my friend David. It's true that you don't want to discuss anything that might result in your customer's violating the rules, but, if you need financial information to determine whether the customer qualifies for an exemption, you'll probably have to ask for it. For example, if you need to know the percentage of revenues received by a convenience store representing fees from money orders or lottery tickets they sell, you won't find it in any traditional financials (and most of these people don't borrow, so you won't have financials in file anyhow). So you'll have to ask for help from the customer.

Whether getting the customer involved in the process makes the process too costly and cumbersome to warrant pursuing the exemption is a question you'll want to get resolved.


Answer by Richard Insley: Needless to say, I'll happily join any effort to discourage Phase II exemptions that do not save more than they cost. In today's environment, examiners will probably pay a lot more attention to exemptions than routine CTR filings.

First published on 12/6/04

First published on 12/06/2004

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