Currency Transaction Reports

FinCEN is the U.S. Treasury's Financial Crimes Enforcement Network. Broker-dealers, banks, casinos, and check-cashing/wire transfer firms file various FinCEN forms when handling certain transactions.

Under the Bank Secrecy Act (BSA), FinCEN requires that for transfers of funds of $3,000 or more, broker-dealers obtain and keep certain specified information concerning the parties sending and receiving those funds. In addition, broker-dealers must include this information on the transmittal order itself.

For example, if a customer sends an electronic funds transfer (EFT) to his father's bank account from his own brokerage account, detailed records are required if the amount is $3,000 or more.

Cash transactions over $10,000 require that broker-dealers file a Currency Transaction Report (CTR), FinCEN Form 104.

Why? Because terrorist and criminal organizations fund their operations through money laundering. Since broker-dealers are financial institutions, they're included with banks, casinos, check-cashing services, etc., and required to keep records helping the government prevent these operations.

The form is available at ctr.pdf. Detailed information is required and provided on the parties involved in the transaction, the financial institution involved, and the amount and source of funds.

A test question could say a customer brings in $5,000 over his lunch break and $6,000 at 3:30 PM, all to be deposited in his account. Because the total exceeds $10,000, a CTR is required.

The transactions just discussed require recordkeeping and retention based on the amount of the transaction. On the other hand, any suspicious transaction requires them to file an SAR (Suspicious Activity Report).

what if a customer endorses a check made payable to him from a third party for $10,025. The bank charges a $30 fee to cash large Pi-party checks same-day; therefore, the customer receives $9,995 in an envelope from the teller. Must the bank fill out a CTR?
No. The cash amount was not > $10,000. But, if they have reason to believe the customer is involved in illegal activities, they are required to file an SAR. And, if he consistently receives as close to $10,000 in cash without going over, it might appear he is trying to avoid any FinCEN forms from being filed. Which would be suspicious.


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