FAQs
Filing Instructions – CTR Part I, Person Involved in Transaction(s)
Filing Instructions – CTR Part II, Amount and Type of Transaction(s)
Filing Instructions – CTR Part I, Person Involved in Transaction(s)
Question: We had a bank customer cash checks totaling over $10,000 that were not drawn on our bank (not on us). When completing the CTR, do we need to include the account number at the bank the checks are drawn off of in Items 21 or 22?
Answer: IBA received guidance from FinCEN that indicates the filing bank should only include account numbers for Items 21 or 22 if it is a customer account held at the bank. Do not include account numbers of any other bank/financial institution on CTRs.
Another way to look at this is the CTR is filed by the bank on activity at the bank. The field only asks for an account number and not a routing number. Since no routing number is included, it would suggest only the account numbers held at the filing bank are reported.
Question: We have an elderly customer that deposited currency in excess of $10,000 and triggered a CTR filing. He does not have a current driver’s license. We do have an expired license that has been used previously by our bank for his identification. Can we complete this CTR using his expired ID as verification of his identity?
Answer: FinCEN issued a ruling that addresses this common issue among elderly (or disabled) customers. It states that it is the bank’s responsibility to identify and report accurate information. If the bank is confident that the elderly customer is who he says he is, and can verify their identity per the bank’s policy, the bank may complete the CTR using this information. The FinCEN ruling instructs users to complete the CTR by indicating “Elderly” in the field for method used to identify the individual. Here is the link for that FinCEN ruling which provides a great analysis and an example scenario, reproduced in part here:
…It is also the responsibility of a financial institution to verify and to record the identity of individuals conducting reportable currency transactions and/or cash purchases of certain monetary instruments as required by BSA regulations §§ 103.28 and 103.29. Only if the financial institution is confident that an elderly or disabled patron is who s/he says s/he is may it complete these transactions. A financial institution shall use whatever information it has available, in accordance with its established policies and procedures, to determine its patron’s identity. This includes review of its internal records for any information on file, and asking for other forms of identification, including a social security or Medicare/Medicaid card along with another document which contains both the patron’s name and address such as an organizational membership card, voter registration card, utility bill or real estate tax bill. These forms of identification shall also be identified as acceptable in the bank’s formal written policy and operating procedures as identification for transactions involving the elderly or the disabled. Once implemented, the financial institution should permit no exception to its policy and procedures. In these cases, the financial institution should record the word “Elderly” or “Disabled” on the CTR and/or chronological log and the method used to identify the elderly, or disabled patron such as “Social Security and (organization) Membership Card only ID.”
Question: How should a CTR be completed when the bank offers a courier service? In this situation, a bank staff member goes to the customer’s place of business and the business puts their deposit into a locked safe in the vehicle that the bank staff member is driving. Once the vehicle returns to the bank branch, the safe is unlocked and transactions are processed following bank procedures.
Answer: If there is no contract between the bank and business customer to provide courier services, and this service is being provided as a “one-off situation” or special accommodation, the deposit should be treated as if was made at the bank. The person who supplied the deposit to the bank staff courier would be the conductor, so a Part I 2b (Person conducting transaction for another) should be completed on the conductor (person putting the deposit in the locked safe of the vehicle) and a Part I 2c (Person on whose behalf transaction was conducted) would be completed on the business entity making the deposit.
However, if the bank has a contract for this service with the business customer, the transaction should be treated similarly to an Armored Car Service (ACS). As defined in the FinCEN Currency Transaction Report instructions, ACS involves a service to pick-up or deliver currency under contract to the financial institution(s) where transactions take place. So, when an ACS contract is in place, a Part I 2d (Common Carrier) would be selected because there is an ACS contract with the business customer, and the information on the ACS company would be recorded in Part I (thus, the courier service — in this case, the bank, not the individual bank staff member). The Instructions state that if 2d (Common Carrier) is checked, then box 4b “If entity” must also be checked. In addition, a Part I 2c (Person on whose behalf transaction was conducted) will be completed on the business benefiting from the transaction. This would also apply similarly to a bank offering courier service for delivering cash or coin when the amount exceeds $10,000.
Question: If a customer deposits over $10,000 into their joint account, we normally file a CTR on both owners of the account. A Part 1 would be completed for the owner depositing the funds, checking box 2a — Person conducting transaction on own behalf. Another Part 1 would be completed for the second owner, checking box 2c — Person on whose behalf transaction was conducted. However, in our most current situation one of the joint owners recently passed away but is still listed as an owner on the account. Do we still complete a Part 1 on the deceased joint owner?
Answer: If the account is owned jointly with survivorship, then upon the death of one owner, the funds pass directly to the surviving owner. As a result, a CTR Part 1 would only be completed for the surviving owner, checking box 2a — Person conducting transaction on own behalf.
Question: A husband and wife own a limited liability company (LLC). The wife made a CTR reportable deposit into the LLC account. Do we include both the husband’s and wife’s information on the CTR like we do when a reportable deposit is made into their personal, jointly owned account?
Answer: No. This type of account is not treated like a personal, jointly owned account where we assume that both owners benefit from the deposit. In this case, the funds belong to the LLC — a separate legal entity. A Part I 2c is completed on the LLC and a 2b is completed on the wife as the person conducting the transaction for another.
Question: John and Susie have a joint checking account. John withdraws $11,000 in cash from the joint account. Must a Part I be completed on the CTR for both John and Susie?
Answer: Since John made the withdrawal, he conducted the transaction on his own behalf and a Part I must be completed for him. The bank is only required to complete a Part I for Susie if there is knowledge that the transaction was also conducted on her behalf. Refer to question No. 24 of FinCEN’S CTR FAQs. (August 2020)
Question: John and Susie have a joint checking account. John deposits the $11,000 in cash into the joint account. Must a Part I be completed on the CTR for both John and Susie?
Answer: Yes, a Part I must be completed for both John and Susie. Since the account is owned by both individuals, they both can benefit from the deposit. Refer to question No. 23 of FinCEN’s CTR FAQs. (August 2020)
Question: A checking account is owned by ABC, LLC. Laura and Dan are the managing members of the LLC and are authorized signers on the account. Laura deposits $15,000 in cash into ABC’s checking account. Must a Part I be completed on the CTR for the LLC, Laura, and Dan?
Answer: No, a Part I is not required for the LLC, Laura and Dan. Since the deposit went into an account owned by ABC, LLC, the deposit was made on behalf of the entity. Therefore, a Part I should be completed for the LLC reflecting 2c “Person on whose behalf transaction was conducted.” Laura conducted the transaction and a Part I must also be completed on her reflecting 2b “Person conducting transaction for another.” A Part I is not required for Dan because he does not own the account (the LLC does) and did not conduct the transaction. Even though Dan has an ownership interest in the business, an LLC is legally separate from the managing members. Additionally, authorized signers do not have ownership of the account either. So, in this scenario it is ABC, LLC that benefits from the transaction and not Dan.
Question: How do we complete the Part I’s for CTRs when the account affected by the reportable transaction is a “Lawyer Trust Account?”
Answer: In April 2016, FinCEN provided the IBA with following guidance on how to complete the Part I for reportable transactions on a Lawyer Trust Account:
- One Part I should be completed on behalf of the Law Firm itself (not the trust account);
- A second Part 1 should be completed on behalf of the client(s) to whom the funds are being deposited into the “trust” account if the information is provided by the individual conducting the transaction; if not document the CTR file as to why the information was not provided to complete a Part 1 on the client(s); and,
- Another Part 1 should be completed for the individual conducting the transaction on behalf of the Law Firm.
Question: I have a CTR completion question. We have a business customer with multiple entities that are cash intensive. They oftentimes conduct deposits solely through our night drop. We complete a CTR Part I for each entity involved in the transaction and complete Item 2 as “c – person on whose behalf transaction was conducted.“ Do we need to include a Part I with Item 2 completed as “b – person conducting transaction for another” and select “Unknown” for items such as name, address, TIN, date of birth and form of identification used to verify identity?
Answer: No. IBA has verified with FinCEN, when a deposit is taken via the bank’s night drop, there is no need to complete a Part I to indicate the unknown status of the person conducting the transaction for another. Be sure to complete Item 24 of Part II as “Night Deposit,” which explains why there is no conductor information to report. Refer to the FinCEN Currency Transaction Report Electronic Filing Requirements guide for specific instructions regarding the completion of “Part I Person Involved in Transaction,” Items 2 through 22 and “Part II Amount and Type of Transaction(s),” Item 24.
Question: How do I report account numbers for internal bank accounts included in a reportable CTR transaction – specifically, Item 21 (cash in amount for individual or entity listed in Item 4 & account numbers affected) and Item 22 (cash out amount for individual or entity listed in Item 4 and account numbers affected) on Part I of the CTR? I am unsure of the account numbers to include. For example, Customer A purchases a bank cashier’s check for cash in the amount of $10,500. The account number affected by the cash transaction is the bank’s internal cashier’s check demand deposit account. Thus, do we list the bank’s internal account number within Item 21 for this reportable transaction? These accounts could be general ledger accounts, demand deposit accounts, savings accounts, etc.
Answer: No. When an internal bank account number is affected by the CTR reportable transaction, you would not list those within the applicable areas of Part I on the CTR. Banks are exempt from CTR reporting and therefore those internal account numbers are not required to be reported on the CTR. This does not eliminate the requirement to complete the applicable Part I for the party purchasing the cashier check and triggering the CTR filing.
Question: A teller at our bank accepted a Consular ID Card as identification for an individual cashing a negotiable instrument. How do we complete Part I, Person Involved in Transaction – Item 20 – Form of identification used to verify identity on the CTR?
Answer: Item 20 is completed as “Other – Consular ID Card.” The “Number” field is completed with the “ID” number found on the Consular ID Card. The “Country” field is completed as “US” because the card is actually issued by a consulate in the United States. The “Issuing State” is completed based on the “Authority” listed on the back of the card.
Question: An elderly person, who has been our customer since before October 2003 when the CIP rule became effective, came in and cashed a check in excess of $10,000. The customer does not have a driver’s license or state issued ID, but we do have their name, address, social security number and date of birth, plus we have a copy of their social security card. In preparing the CTR, how do we complete Item 20 “form of identification” for this customer? Should we check the box “Other” and add the social security card?
Answer: FinCEN offers FAQs on their website which help to answer this question. Question #21 asks if “form of identification” (Item 20) is a required field and, if so, what should be entered. The answer states in part “FinCEN expects…that financial institutions will provide the most complete filing information available within each report, regardless of whether or not the individual fields are deemed critical for technical filing purposes… Please note that if “Other” is selected in Item 20, you must either put in the number associated with that other form of identification or space fill the “Number” box to avoid a validation error.
In addition, Administrative Ruling 92-1 states the following regarding elderly or disabled patrons:
Only if the financial institution is confident that an elderly or disabled patron is who s/he says s/he is may it complete these transactions. A financial institution shall use whatever information it has available, in accordance with its established policies and procedures, to determine its patron’s identity. This includes review of its internal records for any information on file, and asking for other forms of identification, including a social security or Medicare/Medicaid card along with another document which contains both the patron’s name and address such as an organizational membership card, voter registration card, utility bill or real estate tax bill. In these cases, the financial institution should record the word ‘‘Elderly’’ or ‘‘Disabled’’ on the CTR and/or chronological log and the method used to identify the elderly, or disabled patron such as ‘‘Social Security and (organization) Membership Card only ID.’’ https://www.fincen.gov/resources/statutes-regulations/administrative-rulings/formerly-known-92-1-how-should-financial
The IBA contacted FinCEN to verify that the Administrative Ruling 92-1 was still in effect and should be followed. FinCEN indicated the guidance was still valid, however with the change in CTR filing format, they indicate that it is acceptable to include or leave out the word “Elderly” on the CTR. So in this situation, since the bank has properly identified the customer in accordance with their established policies and procedures and has a copy of the social security card on file, the bank should mark “Other” for Item 20 and list “Elderly – Social Security Card and __________ (other form of ID)” or just “Social Security Card” as the type of document(s) if that is the only document used for that transaction, then complete the “Number” box accordingly.
Question: We are completing a CTR on a customer who is retired. Since they are no longer employed, can we state that they are “retired” for their occupation on the CTR?
Answer: FinCEN’s FAQs address this issue in question #20. If the bank knows the former occupation of the customer, FinCEN wants to know that information. For example, state “retired engineer” or “retired banker”. The FAQ can be found at https://www.fincen.gov/frequently-asked-questions-regarding-fincen-currency-transaction-report-ctr.
- Is it acceptable to indicate terms such as “homemaker,” “retired,” or “unemployed” as descriptions for occupations?
When recording the occupation, profession, or type of business of the individual or entity listed in Part I, use specific descriptions such as “doctor,” “carpenter,” “attorney,” “used car dealership,” “plumber,” “truck driver,” “hardware store,” etc. Generally, do not use non-descriptive items such as “businessman,” “merchant,” “retailer,” “retired,” or “self-employed.” If words like “self-employed,” “unemployed,” “homemaker,” or “retired” must be used, however, add the current or former profession if known (e.g., “self-employed building contractor,” “retired teacher,” or “unemployed carpenter”). Financial institutions should pay particular attention to customers with non-specific occupations who continually make large cash deposits.
Question: What if the bank does not know the customer’s former occupation?
Answer: The guidance states to include the description of the former occupation if it is known. If the former occupation is not known, the bank employee should request this information from the customer. The bank employee should recognize that a CTR is required and obtain the required information, including the former occupation of the customer.
Question: If a parent comes into the bank and deposits cash in both a personal account and the account of a minor child in excess of $10,000 in cash, the bank would be required to complete a CTR showing the parent as both the conductor and the one receiving benefit as well as the minor child receiving benefit. What occupation should be filled in for the minor child and what should be used for ID (assuming the bank did not obtain an ID for the child when the account was opened)?
Answer: Since the minor is benefiting from the transaction, they must be listed in Part I; check Box 2(c) [Person on whose behalf transaction was conducted]. When the bank completes a Part I for the child, in Item 9 [Occupation or type of business], they can indicate “Student” or “Unemployed Student”. The more specific, the better. Additionally, “Minor Child” is acceptable. In Item 20 [Form of identification used to verify identity], check “Other” and write “N/A – minor child, used parent’s ID.” Children do not have legal capacity.
Filing Instructions – CTR Part II, Amount and Type of Transaction(s)
Question. A customer came into purchase a cashier’s check and gave the teller $23,700 cash, the cashier’s check purchased was for $23,652 and the teller gave the customer $48 in cash back. The teller’s transaction included the following:
- Cash in ticket — $23,700
- Cashier’s check purchase — $23,652
- Cash out ticket — $48
How do we record the cash back of $48 in Section 25 on the CTR form?
Answer: The transaction would be recorded as follows in Section 25 CASH IN of the CTR:
- d. Purchase of negotiable instrument — $23,652
- z. Other (specify) — enter “change to customer” or “cash back” and record the value, $48
- Total cash in — $23,700
This question was presented to FinCEN both verbally and in writing and the clarification above is the response received. The FinCEN CTR Electronic Filing Requirements XML Schema 2.0 User Guide Section *25 Total Cash In on pages 100-101 also verify this:
*25. Total cash in a. Deposit(s) b. Payment(s) c. Currency received for funds transfer(s) out d. Purchase of negotiable instrument(s) e. Currency exchange(s) f. Currency to prepaid access g. Purchase(s) of casino chips, tokens, and other gaming instruments h. Currency wager(s) including money plays.
Item *25 Total cash in: Record the total cash in amount involved in the transaction(s) if that amount is greater than $10,000. Record the total amount on the “Total cash in” line and total or subtotals on whichever of line 25a through 25i best describe the transaction or aggregated transactions. If any portion of the total amount is not described by any of those options, record that portion on line 25z and provide a brief description of the transaction(s) in the “Other” text field. If the total amount of the cash in transaction or aggregated transactions is $10,000 or less, do not record any amounts in Item 25. The total of the amounts recorded in fields 25a through 25z must equal the amount recorded in the Item 25 “Total cash in” field. The total cash in will be automatically computed in BSA E-Filing discrete FinCEN CTR from the entries in 25a through 25i and 25z. See General Instruction 14 for instructions on determining whether transactions are reportable on a FinCEN CTR.
Question: When should the “Aggregated Transactions” box (Item 24) on the CTR be checked?
Answer: Filers should check box 24e “Aggregated transactions” (along with any other box applicable in Item 24) only when ALL of the following circumstances apply:
- None of the individuals conducting the related transactions were identified;
- All of the transactions were below the reporting requirement; and
- At least one of the aggregated transactions was a teller transaction.
A “teller transaction” includes but is not limited to the deposit or withdrawal of currency by an individual at the teller window, an individual making a loan payment with currency at the teller window or, an individual exchanging currency at the teller window. The option “Aggregated transactions” is not the same as Item 3 “Multiple transactions,” which can involve transactions that are above the reporting requirement.
FinCEN’s CTR FAQ provide the following example — Assume there were four $3,000 deposits made into ABC Restaurant’s business account in one business day, and the filing institution did not identify any of the individual transactors, and at least one of these deposits was made via a teller transaction, the filing institution would complete a Part I on ABC Restaurant checking Item 3 “Multiple transactions” and checking “Aggregated transactions” in Item 24.
However, if the filing institution identified the fourth individual transactor, as a result of knowing the transaction takes ABC Restaurant over the $10,000 threshold, then the filing institution would complete a Part I on ABC Restaurant checking Item 3 “Multiple transactions” and a separate Part I on the fourth individual transactor. The filing institution would NOT check “Aggregated transactions” in Item 24 due to the fact that it identified one of the transactors.
Question: If a cash transaction over the amount of $10,000 is completed on a Saturday when the branch was open for business but posted to the account the next business day (typically Monday unless of a Federal Holiday), how do you complete field #23 – date of transaction – on the CTR?
Answer: Date of transaction, field No. 23, of the CTR should be completed with the business day the transaction occurred, not the banking day. So, if the cash transaction was completed on a Saturday but posted to the account on the next business day (typically a Monday unless a federal holiday occurred), the CTR date of transaction (field No. 23) would be Monday, the next business day. This would also apply if a cash transaction was conducted on a business day after cut-off time. For example, if the bank establishes a cut-off time of 4 p.m. and a cash transaction is received after this time when the bank is still open, the posting date (business day) of the transaction would be next business day, so therefore the date of transaction for field No. 23 would also be the (posting date) next business day.
This is detailed in FinCEN’s CTR Electronic Filing Requirements as provided below.
FinCEN Currency Transaction Report (CTR) Electronic Filing Requirements
FinCEN CTR XML Schema User Guide (Version 1.7 | July) Page 85 General Instructions
- Who must file: Each financial institution … must file a FinCEN CTR for each deposit, withdrawal, exchange of currency, or other payment or transfer, by, through, or to the financial institution which involves a transaction in currency of more than $10,000. Multiple transactions must be treated as a single transaction if the financial institution has knowledge that they are by or on behalf of the same person and they result in either currency received (cash in) or currency disbursed (cash out) by the financial institution totaling more than $10,000 during any one business day. For a bank, a business day is the day on which transactions are routinely posted to customers’ accounts, as normally communicated to depository customers.
Question: John Doe made two cash deposits in two separate corporate accounts totaling $12,000 on one business day: $6,000 into ABC, INC. and $6,000 into XYZ, INC. On that same day, Susie Smith made a cash deposit of $400 into the account owned by XYZ, INC. These two corporations are operated independently. Would the $400 deposit into XYZ, INC. be included on the CTR filing?
Answer: No, the $400 deposit is not required to be included. The FinCEN CTR Filing Guide states that transactions must be by or on behalf of the person whose aggregate transaction total exceeds the reporting threshold.
Who Must File: Each financial institution (other than the U.S. Postal Service, for which there are separate rules) must file a FinCEN CTR for each deposit, withdrawal, exchange of currency, or other payment or transfer, by, through, or to the financial institution which involves a transaction in currency of more than $10,000. Multiple transactions must be treated as a single transaction if the financial institution has knowledge that they are by or on behalf of the same person and they result in either currency received (cash in) or currency disbursed (cash out) by the financial institution totaling more than $10,000 during any one business day. For a bank, a business day is the day on which transactions are routinely posted to customers’ accounts, as normally communicated to depository customers.
In this scenario, Susie’s deposit does not need to be listed because:
(1) Her deposit is not conducted by or on behalf of John Doe, whose transactions do exceed the $10,000 threshold triggering the CTR;
(2) The two companies are operated independently, so their transactions are not by or on behalf of the same person and individually do not exceed the $10,000 threshold; and
(3) The total amount of Susie’s transactions does not exceed the $10,000 threshold.
Therefore, in this case there will be three Part I sections completed with the following details:
- John Doe, (2b) Person Conducting Transaction for Another, Multiple Transactions, Cash In = $12,000
- ABC, INC., (2c) Person on Whose Behalf Transaction was Conducted, Cash In = $6,000
- XYZ, INC., (2c) Person on Whose Behalf Transaction was Conducted, Cash In = $6,000
Question: When there are multiple transactions of the same type (for example: cash deposits with dollar and cents for each transaction) in one day which in aggregate exceed the $10,000 threshold, are these same type transactions added together (e.g., cash deposits) and then the total rounded up to the next whole dollar?
Answer: Yes. Directly from FinCEN, “For rounding purposes, the actual amount of transactions of the same type would be added, then rounded.” This is supported by FinCEN CTR Electronic Filing Requirements:
FinCEN CTR XML Schema User Guide (Version 1.4.1 | November 2019) Page 88
- Monetary amounts: Record all U.S. Dollar amounts rounded up to the next whole dollar. The amount $15,265.25 would be recorded as $15,266.
FinCEN also has a frequently asked question regarding CTR on this topic:
Question 17. Should we aggregate “multiple transactions”? What is the proper way to complete a CTR on transactions involving multiple business entities?
Yes. All the individual transactions a financial institution has knowledge of being conducted by or on behalf of the same person during a single business day must be aggregated. Debits must be added to debits, and credits must be added to credits. If cash debit or credit totals exceed $10,000 in a business day, a CTR is required. If debits and credits each exceed $10,000, they can each be reported on a single CTR, but financial institutions should not off-set debits and credits against one another or reconcile for reporting purposes cash-in transactions with cash-out transactions. Multiple transactions in currency must be treated as a single transaction if the financial institution “has knowledge that they are by or on behalf of any person and result in either cash in or cash out totaling more than $10,000 during any one business day.”
Question: When there are different types of cash transactions in one day (for example: cash deposits and loan payments with dollar and cents for each transaction amount) which in aggregate exceed the $10,000 threshold, how are the amounts rounded and reported on the CTR?
Answer: FinCEN has acknowledged that totals in Item 25 (cash in by transaction type) and 27 (cash out by transaction type) may differ (or be slightly more) from Item 21 (cash in for person listed in Part I) and 22 (cash out for person listed in Part I) due to rounding and has provided some flexibility. In Item 25/27, the bank should round the total of each like type transaction amount up to the next whole dollar and represent that total in the correct row (25a for cash deposits and 25b for payments). Then, in Item 21/22 the bank can provide the total of all transactions rounded up to the next whole dollar (which could be less than the total in Item 25/27) or the total of each transaction type rounded up to the next whole dollar and then all transaction types added together (same as totals in Item 25/27).
This is supported by FinCEN CTR FAQs #28 as provided below.
Question 28. When we round the amounts on the FinCEN CTR, the total in Item 25/27 may differ from that in Item 21/22 due to rounding. Is this acceptable??
Yes, this is acceptable, if the difference was a result of a financial institution following the instructions on rounding dollar amounts. The following scenario outlines the two choices available for the filing institution to follow in completing Items 21/22 and Items 25/27:
Scenario: A customer deposits $8,345.18 into his or her personal account and also makes a loan payment of $2,345.43 on the same business day. The daily report shows this customer brought in $10,690.61 in one business day.
- Option 1: Per the FinCEN CTR instructions, each dollar amount reported on the FinCEN CTR is to be rounded-up to the next dollar. Therefore, the financial institution would enter $10,691 in Part I Item 21 of the FinCEN CTR. In Part II, the financial institution would enter $8,346 in Item 25a and $2,346 in Item 25b. As a result, the total in Item 25 would reflect $10,692. The FinCEN CTR will validate and be accepted as the total in Item 21 (or Item 22 for a cash-out transaction) is not more than the total for Item 25 (or Item 27 for a cash-out transaction). Filers can internally document as a general note to their FinCEN CTR files that the amounts may differ in these situations as a result of following the FinCEN CTR rounding instructions. Both regulators and law enforcement were involved in the designing of the FinCEN CTR and are aware and accepting of the possible discrepancy.
- Option 2: As a means of avoiding these differences on the FinCEN CTR, the filer can round up all the amounts involved separately and then aggregate the separately rounded amounts. For example, using the above scenario, the filer would round-up the $8,345.18 and $2,345.43 transactions separately, to $8,346 and $2,346, respectively, which would aggregate to $10,692 and then enter this amount in Part I Item 21 of the FinCEN CTR. In Part II, the financial institution would enter $8,346 in Item 25a and $2,346 in Item 25b. As a result, the total in Item 25 would reflect $10,692 and Items 21 and 25 would match. If applicable, a financial institution should still internally document as a general note to its FinCEN CTR files if these amounts differ slightly from the amounts shown on the daily reports due to rounding the amounts involved separately.
Question: One of the bank’s customers owns several businesses and has multiple accounts at the bank for these businesses. The owner of these business accounts came into the bank and withdrew various amounts from each account during the same business day. Each amount was under the $10,000 reporting threshold, but the total amount of all the withdrawals was over $10,000. How should the CTR be completed for these transactions?
Answer: A CTR must be filed when a single or multiple currency transaction(s) by or on behalf of the same person exceed $10,000 (either cash in or cash out) on any business day. In this case, the owner of the accounts conducted the transactions on behalf of the businesses he owns, so a CTR is required.
Complete a separate Part I for each business that the owner conducted the transaction. Enter the information for each business under Part I 2c (Person on whose behalf transaction was conducted) since the transactions were conducted on behalf of business. Include the owner’s information under Part I 2b (Person conducting the transaction for another) since the owner is conducting the transaction for the businesses. There were multiple transactions. So, check Part I – Item 3, Multiple Transactions. Also, even though all of the transactions were below the reporting threshold, the conductor was identified. Therefore, Part II – Item 24 Aggregated Transactions would not be checked.
Additional guidance can be found in FAQ issued by FinCEN. The FAQ can be found at https://www.fincen.gov/frequently-asked-questions-regarding-fincen-currency-transaction-report-ctr FAQ #17addresses how to complete the CTR when multiple business entities are involved.
Question: How should we complete Part I Item #3 of the CTR regarding multiple transactions in the following situation? A customer comes up to the teller and makes a $6,000 deposit to their checking account and a $5,000 deposit to their savings account. The teller runs the transaction using one cash in ticket in the amount of $11,000 and provides the customer one receipt indicating both transactions. Should Item #3 Multiple Transactions be checked?
Answer: In November 2016, FinCEN provided the Iowa Bankers Association with the following guidance as it relates to this question:
Yes, Item #3 Multiple Transactions should be checked on the Part I for the customer who performed both transactions as this would be considered multiple transactions. There were two transactions performed: one to the checking account and one to the savings account on the same day. The transactions involved cash over $10,000 requiring a CTR to be filed.
Question: When we are completing a CTR is it okay to round the amounts involved? One person in our office says it should be to the penny – though most of us think the numbers should be rounded to the nearest whole dollar.
Answer: Not only are you permitted to round to whole dollar amounts, you are instructed to do so. The only stipulation is that you always round UP. The CTR instructions indicate if less than a full dollar amount is involved, increase that figure to the next highest dollar. For example, if the currency totals $20,000.05, show the total as $20,001.00.
Question: When completing a CTR for a transaction involving a negotiable instrument with funds partially deposited into an account and over $10,000 is deducted from the deposit as ‘less cash received,’ how is Item 27 – Cash Out – completed?
Answer: FinCEN has provided the IBA guidance on this matter indicating the bank should enter the cash out amount in Item 27 as d. Negotiable instrument(s) cashed. This should not be confused with Item 27 – a. Withdrawal(s) which is utilized to report cash withdrawn from an account with previously deposited funds available to complete the request.
Question: I have a question regarding CTR reporting. We have an agreement with a local grocery store where a very few select employees can bring a check to the bank, payable to the bank, and receive coin/currency to take back to the store — a change order. In this instance, assuming the business is not exempt from CTR reporting, if the cash back or change order exceeds $10,000 and a CTR is required, would you choose the reason or category the CTR is being filed as “currency exchange” or “cash taken on a negotiable instrument?” Why one over the other?
Answer: The transaction should be reported as a negotiable instrument cashed with the amount of cash (rounded to the next highest dollar) in Item 27(d). The instructions for the CTR state that a negotiable instrument is ALL checks and drafts (including business, personal, bank, cashiers, and third-party), money orders, and promissory notes. In addition, for CTR purposes, traveler’s checks are also negotiable instruments. A currency exchange is a cash-for-cash exchange. One example is if the store sent an employee with large bills to exchange for smaller bills.
Exempt Customers/Transactions
Question: We filed a Designation of Exempt Person (DOEP) on a Phase II commercial customer in 2009. The customer continues to qualify for a Phase II exemption, but we are unable to locate the original DOEP. We have a federal regulatory examination coming up, and I am concerned that our regulator may have an issue with this.
Answer: The record retention requirement for DOEPs under the Bank Secrecy Act is five years, so you would not be required to retain a DOEP from 2009. However, you still need to make your annual reviews for the last five years available for examination if requested. See Appendix P – BSA Record Retention Requirements of the FFIEC BSA/AML Examination Manual which states:
A bank must maintain a record of all designation of persons exempt from CTR reporting as filed with the Treasury for a period of five years from the designation date.
Question: We want to exempt our correspondent bank from the Currency Transaction Report (CTR) filing requirement. Do we need to file a Designation of Exempt Person (DOEP) and conduct an annual review?
Answer: Banks no longer have to file a DOEP report for, or conduct an annual review of, customers who are depository institutions operating in the United States, U.S. or state governments, or entities acting with governmental authority. The DOEP filing and annual review requirements apply to businesses listed on a major national stock exchange (“listed businesses”), non-listed businesses and payroll customers. For additional information on CTR exemption eligibility, read here.
Question: We know businesses that sell motor vehicles, like cars and trucks, are ineligible for the Phase II exemption from filing Currency Transaction Reports. Are we allowed to exempt a motorsports dealer who sells ATVs, jet skis, lawn mowers and snowmobiles?
Answer: No, these businesses cannot be exempted from CTR filing requirements either. FinCEN lists several businesses that are not eligible for exemption. Included on this list are businesses engaged primarily in “Purchasing or selling motor vehicles of any kind, vessels, aircraft, farm equipment, or mobile homes.”
FinCEN issued FI-2012-G005 in response to a request for clarification on the definition of “motor vehicle.” The guidance explains that “motor vehicle” is defined as “a self-propelled vehicle or machine.” The definition includes a variety of low-speed vehicles and those that are electric-powered, although they may not be manufactured primarily for use on the public streets, roads, and highways. These types of vehicles include scooters, mopeds, low speed vehicles, ATVs, snowmobiles, go-carts, etc. as well as several other self-propelled machines including farm, construction, and forestry equipment.
Question: A bank has a customer (Joe) with two separate business accounts. One is a sole proprietorship; the other is a corporation; both have their own separate EIN’s. Joe frequently deposits cash into both accounts on the same day, which when aggregated totals over $10,000. However, separately the transactions do not total over $10,000. The corporation is exempt from CTR filing. Should we file a CTR on Joe (personally) for the cash transactions over $10,000, even though they are for his businesses?
Answer: If Joe brings in over $10,000 in cash for deposit into the two business accounts on the same business day, subtract the amount being deposited to the exempt account to determine if a CTR is required. If there is still over $10,000 in cash deposited to the sole proprietorship account, file a CTR.
Question: Are banks required to exempt customers from CTR filings? Our bank has never exempted anyone. We just file CTRs on all cash transactions over $10,000. Does the regulation require banks to exempt customers? Why would we want to exempt certain customers?
Answer: There is no requirement to exempt customers from CTR filings under the Bank Secrecy Act. However, a bank usually exempts all eligible customers to avoid being liable for errors on CTRs that they may have otherwise not been required to file. Exempting customers also eliminates the work associated with the filing of frequent CTRs for the same customer when that customer may be eligible for exemption.
Question: We have a business customer that has a checking account and a money market demand account (MMDA); both accounts have been open for one year. They conduct CTR reportable transactions on both the checking account and the money market. We have determined the customer qualifies for the Phase II CTR exemption as a “non-listed business” entity. When we file the Designation of Exempt Persons (DOEP), do we file on the customer or the account? The money market is not a transaction account. Can we exempt reportable transactions deposited into this account as well?
Answer: The Designation of Exempt Person (DOEP) is filed on the customer, not the account. The DOEP does not even have a field for reporting the account number. FinCEN’s guidance FIN 2012-G003 states the following criteria for exempting non-listed businesses:
Before treating a non-listed business or payroll customer as exempt, a bank must first determine that the customer has conducted five or more transactions within the previous year, has been a customer of the bank for at least two months (or less time on a risk-assessed basis), and, in the case of non-listed businesses, derives no more than 50% of its gross revenues from any ineligible business activity.
To be eligible for exemption, the customer must have a transaction account and meet the criteria mentioned above. In August 2000, FinCEN issued CTR Exemption Regulation Amended to Include MMDAs, a guidance document that explains deposits made into a MMDA may also be exempted under certain circumstances. The guidance states the following on exempting MMDAs:
An exemption for a non-listed business customer or a payroll customer applies to these customers’ MMDAs that are used for business purposes in addition to their transaction accounts. For an MMDA of a non-listed business or a payroll customer to be exemptible, such a customer must have maintained an eligible transaction account in addition to the MMDA for at least 12 months and met all other requirements of the CTR exemption regulations. It should be noted that an exemption for payroll customers applies only to account withdrawals for payroll purposes.
Question: One of the bank’s previously exempted businesses for CTR purposes became ineligible last year due to not having at least five cash transactions over $10,000. The bank did not file a Designation of Exempt Person (DOEP) to revoke the exemption. Was that a mistake? The business is now eligible once again to be exempt. Since I didn’t file a DOEP to revoke the exemption, do I now file an “exemption amended?”
Answer: Filing a DOEP to revoke a CTR exemption is optional; not required by the Bank Secrecy Act. As soon as you filed your first CTR during the last year for that business, it alerted FinCEN that the business was no longer exempt. Since they are again eligible for the exemption from CTR reporting, the bank starts the exemption process over again. So, you will need to file a new DOEP, indicating the purpose is for the “initial designation.”
Question: Do we need to complete a CTR for cash transactions conducted on behalf of the local public school?
Answer: No. As public schools are acting with government authority, they are automatically exempt. Keep in mind, however, that the bank must complete CTRs for applicable cash transactions conducted on behalf of private schools.
Question: What should a bank do if, during its annual review of business entities exempted from CTR reporting as a Phase II customer, it discovers that the customer no longer meets all the criteria for exemption?
Answer: During the annual review of a Phase II exempt customer, a bank may conclude that a customer is no longer eligible for exemption (for example, if an exempt non-listed business customer conducted only four reportable currency transactions during the year under review). At the time the customer’s ineligibility is discovered, the bank should document the determination of ineligibility and cease to treat the customer as exempt. The bank is not required to back-file CTRs with respect to a designated Phase II customer that had met the eligibility requirements in a preceding year but was subsequently found to be ineligible during the bank’s timely completion of its annual review. In the event the customer meets the eligibility requirements in the future, the bank must file a new DOEP (Designation of Exempt Person) to begin treating the customer as exempt again.
Question: What is the exempt status of a CTR-exempted Phase II customer who reorganizes their business? For example, what is course of action for an exempt customer with a doing business as (“DBA”) account who forms a limited liability corporation as his business grows?
Answer: Since the restructuring of a business may cause that business to become ineligible for exemption or otherwise make the original DOEP (Designation of Exempt Person) filing inaccurate or incomplete with respect to the newly restructured business, banks should consider evidence of a business restructuring as part of their annual review or ongoing customer due diligence. Potential evidence of such restructuring could include changes in the customer’s management, business purpose, operations, customers, ownership, or account relationship with the bank. More specifically, changes to a customer’s account relationship with the bank could include the issuance of a new taxpayer identification number, modifications to the names on the account, changes in account activity, or the addition or removal of signors or controllers of an account.
Banks should use a risk-based approach when determining which factors to consider to ensure that a customer remains eligible for exemption and that the original DOEP filing continues to identify that customer accurately and completely. To the extent such changes make the original DOEP filing inaccurate or incomplete with respect to the newly restructured business, a bank should reevaluate the business for exemption. In such cases, the bank may consider using the risk-based approach for exempting the newly restructured business prior to the two month waiting period. If the restructured business is eligible for exemption and the bank wishes to treat them as such, a new DOEP report must be filed with FinCEN.
In the example used in the question, an unincorporated business that incorporates would likely need reevaluation for the purposes of CTR exemption eligibility. Accordingly, after verifying that the newly restructured business was eligible for exemption, a bank wishing to treat that customer as exempt would need to file a new DOEP report.
Question: A business customer deposited over $10,000 cash on December 28, 2015. This was the first time this customer made a CTR qualifying deposit. Eight days later (January 5, 2016) the business customer made another deposit of over $10,000 cash. The business is listed on the NASDAQ website and is publicly traded, so they fit into the Phase I exemption. Is the bank required to file CTRs for these transactions and a Designation of Exempt Person report (DOEP)?
Answer: Before answering the question posed, it is important to consider this situation in light of the financial institution’s responsibility to monitor and report suspicious activity. If the activity is dramatically different from the usual transactions this customer conducts, the bank should perform and document an investigation to determine whether or not a Suspicious Activity Report should be filed. Items to consider: “Who” brought the funds to the bank, “What” made up the deposit (all large bills, small bills, coin, etc.), “Where” were the funds deposited (ATM, night deposit box, multiple branches, etc.), “When” were the funds deposited (morning, afternoon, just prior to the business day cutoff, etc.), “How” were the funds deposited (by one representative of the business, multiple representatives, etc.) and “Why” did the business’s pattern of activity change such as a special event which generated the funds. Also review the due diligence conducted at the time the account was opened, as this may indicate the fact that the business will be cash intensive at certain times of the year. Once the bank has determined these transactions are not suspicious, only then should they consider the customer for an exemption.
Although the customer qualifies for a Phase I exemption, the bank is still required to file a Designation of Exempt Person (DOEP) form for this customer through the BSA E-Filing System within 30 days after the first currency transaction the Bank wants to exempt. If the DOEP is filed within 30 days of December 28, 2015, the Bank is not required to file a CTR for either transaction. After the DOEP has been filed, the bank should add the customer to its Exempt Persons list and conduct an annual review to verify ongoing exempt eligibility. Phase I CTR Exemptions are addressed in 31 CFR 1020.315(b)(1)-(5).
Question: Our bank has recently added a new branch location through an acquisition. How do we handle the Bank Secrecy Act Designations of Exempt Persons (DOEPs) for CTR reporting exemption purposes for businesses from the newly acquired branch? Can we continue to use the exemption filed by the bank we are acquiring, or do we have to separately exempt this customer, and if so, how?
Answer: In September 2020, FinCEN’s Resource Center verbally informed the IBA that the new/surviving institution must separately exempt the customer. While there is not written guidance that discusses this issue specifically, FinCEN states the absence of any published exclusion or regulatory relief from the requirements outlined in 31 CFR 1020.315 (Transactions of Exempt Persons) would require banks to adhere to the terms outlined in the regulation for all customers that they wish to treat as exempt from CTR reporting. There are certain exclusions or relief from other BSA regulatory requirements for new customers/accounts acquired through a merger or acquisition, such as CIP, but there is no such relief with regards to CTR exemptions.
The BSA Officer basically has two options regarding qualifying the business customer for the DOEP’s following an acquisition.
- Follow the bank’s normal procedures for exempting a business customer. After the business entity has been a customer of the acquired bank for two months, conduct a review of the customer’s transaction activity with your bank. The customer must have at least five qualifying transactions over $10,000 within a 12-month period in order to be considered for exemption.
- The second option available to your bank is to not wait until the business has been a customer of your bank for two months and to conduct the review based upon the business’ transaction history from the acquired bank’s records immediately following acquisition. It should be noted using the acquired bank’s transaction records is a risk-based decision available to the bank. FinCEN guidance FIN-2012-G003 states, banks may use a hybrid approach to designate an otherwise eligible customer for exemption: … the customer may be eligible for exemption in less than two months if the bank conducts a risk-based analysis to form a reasonable belief that the customer has a legitimate business purpose for conducting frequent or regular large currency transactions.
If the eligible customer qualifies for the exemption based on your review, submit a DOEP filing using FinCEN Form 110 under your bank’s name. In the interim, you must file CTRs on the customer (no less than five) for the transactions in the qualifying period, similar to any other customer the Bank is attempting to qualify for DOEP filing exemption status. FinCEN Form 110 must be submitted by the close of the 30th calendar day period beginning after the day of the first reportable transaction in currency with the person sought to be exempted from reporting.
Regardless of whether the bank decides to wait and use its own transaction history or proceed using the acquired bank’s records, IBA’s BSA Exemption Review Form is a great tool to use for your initial exemption review and/or annual exemption review. This form is found on the Bankers Compliance Resources webpage, under the Bank Secrecy Act category.
Note: FinCEN states the only instance that would seem to relieve a surviving institution from the requirement to file a DOEP on customers acquired via an acquisition would be if the institutions in question were already affiliates, and the previously filed DOEPs by either institution listed the other institution as an affiliate on the form indicating that both institutions would treat a particular customer as exempt (Item 25 on the DOEP).
Miscellaneous
Question: Bank A and Bank B are subsidiaries of the same bank holding company. A business customer maintains an account at Bank A. They would like to physically make deposits at Bank B for credit into their account at Bank A, however, because Bank B is located in the same community as their business. Pursuant to an agency agreement between the banks, Bank B can process deposits for Bank A and send the appropriate transaction information to Bank A. Bank A then credits the customer’s account in the amount of the deposit. The two banks settle through an internal account procedure without any physical transfer of cash between banks. The business customer made a cash deposit of $12,000 at Bank B for credit to his account at Bank A. Which bank is responsible for filing the CTR — the bank physically receiving the cash or the bank that maintains the account, or both banks?
Answer: According to the scenario above, the customer’s cash deposit occurs “by, through, or to” Bank B because Bank B is the financial institution that physically receives the cash. Thus, Bank B has an obligation to file a CTR. However, the customer’s cash deposit also can be said to occur “by, through, or to” Bank A, because the cash deposit is conducted at one of its agents. Thus, both Bank A and Bank B are technically required to file a CTR; however, to avoid unnecessary duplicative reporting, FinCEN requires that only one report be filed (in the manner set forth in the following paragraph) with respect to the same transaction. Thus, for example, Bank A would not need to file a CTR with respect to the customer’s $12,000 cash deposit provided Bank A knows that Bank B filed a CTR on that transaction, and vice versa.
If Bank A files a CTR with respect to the customer’s $12,000 deposit, then Bank A should fill out Part III of the CTR form with its own information. In addition, the accounts affected by the deposit should be listed below Box 35 (“Account Number(s) Affected (if any):”) and the phrase “Affiliate Transaction(s)” should be written in below Box 36 (“Other (specify):”). Conversely, if Bank B chooses to file a CTR with respect to the $12,000 deposit, then Bank B should fill out Part III of the CTR form with its own information. Further, the accounts affected by the deposit (even if those accounts are not held at Bank B) should be listed below Box 35 and the phrase “Affiliate transaction(s)” should be written in below Box 36. Completing the CTR in this fashion will serve to notify law enforcement that the reported transaction may not have been physically conducted at the filing financial institution and/or that the account affected by the transaction is not held at the filing institution. (See FinCEN Ruling 2001-1 dated July 26, 2001.)
Best practice would be to include in the Agency Agreement between subsidiaries who will file the CTR to maintain clear lines of responsibility.
Customer Communications
Question: If a customer asks why we are requesting their personal information for a CTR reportable transaction, or the amount of cash deposit that triggers reporting, what should we say?
Answer: To assist frontline staff in these situations, FinCEN developed a pamphlet containing information on the CTR requirements. This pamphlet can be provided directly to customers to address their questions. The bank is not required to provide consumers with the pamphlet, but it is a useful tool that helps customers understand when a CTR is triggered and why the bank is requesting their personal information. The pamphlet can be found here with more information about the pamphlet and its use found here.