As first reported on April 2, banks in Wisconsin have been made to file currency transaction reports (CTRs) for their own cash order shipments due to recent BSA examination findings by the FDIC Chicago Region. FDIC has cited technical BSA examination findings if banks did not file CTRs for their own cash order shipments, as applicable.
In summary, many Wisconsin banks use regional armored car service (ACS) providers, including Thillens, to handle their cash order shipments. In these scenarios, when the bank need order cash from the Federal Reserve, the bank places an order with the ACS. According to FDIC, certain ACS will use cash from of their own inventory, from its own account, to fulfill the bank’s cash order request. In the event the ACS does not have enough cash on hand, the ACS will purchase the cash from a regional bank to fulfill the order for the requesting bank.
It is FDIC’s position, that because the ACS uses its own inventory/account to satisfy the bank’s cash order request, the ACS is considered an MSB under FinCEN’s BSA rules. As an MSB, the bank need file CTRs for any cash transaction the MSB handled over the CTR reporting threshold.
Earlier this week, WBA filed with FinCEN a request for an administrative ruling to exempt banks from having to file CTRs on their own cash shipments. Until FinCEN responds, WBA continues to recommend banks, regardless of primary federal regulator, file CTRs on all eligible ACS transactions.
While FinCEN has not directly instructed WBA how to complete CTR filings for cash shipments by an ACS, including Thillens, WBA recommends the bank identify the ACS as the transactor in Part 1 of the CTR form, checking box 2a “Person conducting transaction on its own behalf”, and “check if entity”. WBA also recommends the bank mark box 24 in Section II “Armored Car (FI Contract)”, and for the bank in Part III to identify the branch(es) involved in the cash shipments. If a bank receives separate instruction directly from FinCEN, the bank need follow FinCEN’s instruction.
WBA has created a template draft letter should a bank wish to file its own request with FinCEN. If used, the bank need modify the template to meet its own situation, as applicable.
By, Alex Paniagua