Here’s a question that a that a Wisconsin credit union recently asked The League’s Legal Affairs team, along with our answer. Do you have a compliance question? Contact The League’s Compliance Hotline at (608) 640-4050 or email.
Q. Are all account signers required to be listed on CTRs filed for deposits into business accounts?
A. A credit union must electronically file a CTR for each transaction in currency (deposit, withdrawal, exchange, or other payment or transfer) of more than $10,000. This includes reporting multiple transactions that add up to a total deposit or total withdrawal of more than $10,000 in one business day by (or on behalf of) any person. For more details, see The League’s ii Release No. 0071 – Bank Secrecy Act.
The League recently contacted the Financial Crimes Enforcement Network (FinCEN) to clarify whether all business signers should be included on CTRs that are filed for a deposit into a business account.
The short answer is no. According to FinCEN, a financial institution is not required to list all business signers on a CTR when a deposit is made into a business account. As FinCEN reiterated, “this applies to businesses such as LLCs or corporations” and excludes sole proprietorships and personal accounts. The reason for this is because business accounts, such as corporations, are legal entities, distinct from their owners.
FinCEN indicated that it would be impossible and/or time consuming to list all signers and/or stock owners associated with a large corporation. Therefore, they confirmed that only the person conducting the transaction for a business entity should be listed on the CTR, if known, as well as the business who is benefiting from the deposit.
Business account example & answer
We provided FinCEN with a hypothetical example and were instructed to complete the CTR as follows:
Joe Smith and Jane Smith are co-owners and signers of ABC Gas Station, Inc. At least once a week, the gas station manager, Jim Jones, deposits more than $10,000 in currency into the ABC Gas Station’s business account.
How is the CTR filed in this situation?
- A Part I on Jim Jones would be completed by checking “Person conducting transaction for another,” and completing the applicable information for Jim Jones.
- Another Part I on ABC Gas Station would be completed by checking “Person on whose behalf transaction was conducted,” and completing the applicable information for ABC Gas Station.
Deposits to consumer accounts
In contrast, if a deposit is made into a consumer account rather than a business account, FinCEN provides this example in their CTR FAQs specifically FAQ # 23:
CTR FAQ # 23
How do I properly complete Part I on the FinCEN CTR for deposits into a joint account? What amounts do we show in Item 21 for each Part I? For example, John and Jane Smith have a joint account together. John Smith deposited $5,000 into the account; later in the same business day, Jane Smith deposited $7,000 into the account.
When a deposit is made into a joint account, the deposit is presumed to be made on the behalf of all account holders because all account holders have potential access to the account balance, and multiple Part Is are required. In this example, the financial institution would complete four Part Is, two for John Smith and two for Jane Smith since each person has more than one Item 2 role.
It is important to note that CTR FAQ # 23 does not apply to business accounts.
Tips for using software systems to help with CTRs
FinCEN also cautioned that when using a third-party software system to assist with CTRs should be mindful of the timing in which CTRs are being filed and how they are translated from the system to the CTR.
For instance, FinCEN noted:
- There are software systems that do not properly code business accounts. These business accounts are being documented and reported as personal accounts, with a descriptor reflecting a “joint owner” instead of an “authorized signer.” If the business account is not built properly in the software system, the information may not map well to the CTR. If the business is being improperly mapped or coded on the CTR, the credit union can file a corrected and/or amended report. See The League’s ii Release No. 0161 for information on the ownership and proper titling of business accounts.
- There are issues with lag times between the software system receiving and processing the CTR versus when it is filed and submitted. Credit unions are reminded that, “ a CTR must be electronically filed with FinCEN within 15 calendar days after the date of the transaction.” (FFIEC BSA/AML Examination Manual)
- It is important for credit unions to have knowledge of CTR filings and work with the software system vendor to ensure compliance.
Tips for contacting FinCEN
FinCEN also provided a few helpful tips when contacting them:
- Please either call the Regulatory Helpline (1-800-767-2825 toll free or 703-905-3591) or email. When emailing, complete the contact form here.
- If you call or email, please leave a detailed message, including your name and phone number. FinCEN generally calls back when a phone number is included – especially for emails.
- Please allow a few days to receive a response. Due to staffing in different departments within FinCEN, it can take time.
- Email is the preferred method of contact, due to differing time zones.
- When emailing, always be sure to select the correct contact group to ensure the information is routed as quickly as possible.