Currency Transaction Reporting
A bank must file a Currency Transaction Report (CTR) (
FinCEN Form 104) for each transaction in currency (deposit, withdrawal, exchange, or other payment or transfer) of more than $10,000 by, through, or to the bank.
Aggregation of Currency Transactions
Multiple currency transactions totaling more than $10,000 during any one business day are treated as a single transaction if the bank has knowledge that they are by or on behalf of the same person. Transactions throughout the bank should be aggregated when determining multiple transactions. Types of currency transactions subject to reporting requirements individually or by aggregation include, but are not limited to, denomination exchanges, individual retirement accounts (IRAs), loan payments, automated teller machine (ATM) transactions, purchases of certificates of deposit, deposits and withdrawals, funds transfers paid for in currency, and monetary instrument purchases. Banks are strongly encouraged to develop systems necessary to aggregate currency transactions throughout the bank. Management should ensure that an adequate system is implemented that will appropriately report currency transactions subject to the BSA requirement.
Filing Time Frames and Record Retention Requirements
A completed CTR must be filed with FinCEN within 15 days after the date of the transaction (25 days if filed magnetically or electronically). The bank must retain copies of CTRs for five years from the date of the report (
31 CFR 103.27(a)(3)).
CTR Backfiling
If a bank has failed to file CTRs on reportable transactions, the bank should begin filing CTRs and should contact the Internal Revenue Service (IRS) Enterprise Computing Center - Detroit (formerly the Detroit Computing Center) to request a determination on whether the backfiling of unreported transactions is necessary.
Money Services Businesses
Definition of an MSB
FinCEN and the federal banking agencies issued interpretive guidance on April 26, 2005, to clarify the BSA requirements and supervisory expectations as applied to accounts opened or maintained for MSBs. With limited exceptions, many MSBs are subject to the full range of BSA regulatory requirements, including the anti-money laundering program rule, suspicious activity and currency transaction reporting rules, and various other identification and recordkeeping rules. Existing FinCEN regulations require certain MSBs to register with FinCEN. Finally, many states have established supervisory requirements, often including the requirement that an MSB be licensed with the state(s) in which it is incorporated or does business.
The following regulatory expectations apply to banks with MSB customers:
- The BSA does not require, and neither FinCEN nor the federal banking agencies expect, banks to serve as the de facto regulator of any type of NBFI industry or individual NBFI customer, including MSBs.
- While banks are expected to manage risk associated with all accounts, including MSB accounts, banks will not be held responsible for the MSB's BSA/AML program.
- Not all MSBs pose the same level of risk, and not all MSBs will require the same level of due diligence. Accordingly, if a bank's assessment of the risks of a particular MSB relationship indicates a low risk of money laundering or other illicit activity, a bank is not routinely expected to perform further due diligence (such as reviewing information about an MSB's BSA/AML program) beyond the minimum due diligence expectations. Unless indicated by the risk assessment of the MSB, banks are not expected to routinely review an MSB's BSA/AML program.
MSB Risk Assessment
An effective risk assessment should be a composite of multiple factors, and depending upon the circumstances, certain factors may be given more weight than others. The following factors may be used to help identify the level of risk presented by each MSB customer:
- Purpose of the account.
- Anticipated account activity (type and volume).
- Types of products and services offered by the MSB.
- Locations and markets served by the MSB.
Bank management may tailor these factors based on their customer base or the geographic locations in which the bank operates. Management should weigh and evaluate each risk assessment factor to arrive at a risk determination for each customer. A bank's due diligence should be commensurate with the level of risk assigned to the MSB customer, after consideration of these factors. If a bank's risk assessment indicates potential for a heightened risk of money laundering or terrorist financing, the bank will be expected to conduct further due diligence in a manner commensurate with the heightened risk.
Additional Money Services Business Guidance
