Q&A: Here is a question that a Wisconsin credit union recently asked one of The League’s Compliance Specialists – Nikki Hutsen – along with her answer. Nikki is a CUNA-certified Bank Secrecy Act Compliance Specialist (BSACS), as are all of our Specialists. To learn more about how the Compliance Specialist program could help your credit union, contact Paul Guttormsson. Do you have a compliance question? Contact The League’s Compliance Hotline at (800) 242-0833 or by email.
Q. Which account holder should be listed on a Currency Transaction Report (“CTR”) when a reportable deposit is made to a joint account?
A. When a deposit is made into a joint account, the deposit is presumed to be made on behalf of all account holders. Therefore, all account holders should be listed on the CTR. Each account holder has the potential to access the account balance regardless of who makes the deposit. In addition, the deposit is benefiting each account holder.
Below are two scenarios that explain how a CTR should be completed for a deposit to a joint account.
Scenario 1: John Smith deposits $15,000 (in cash) into a joint checking account with Jane Smith. Jane Smith did not conduct the deposit. How should the CTR be completed?
The Credit Union should complete Part I for John Smith by selecting option 2a “Person conducting transaction on own behalf.” The deposit amount ($15,000) should be entered in Item 21, along with the affected account number. A second Part I will need to be completed for Jane Smith. This is done by selecting option 2c “Person on whose behalf transaction is conducted.” The deposit amount ($15,000) should be entered in Item 21, along with the affected account number.
Scenario 2: John Smith deposits $5,000 (in cash) into a joint account with Jane Smith. That same day, Jane Smith makes a deposit of $8,000 (in cash) into the same joint account with John Smith. How should the CTR be completed?
In this scenario, the credit union would complete four Part Is, two for John Smith and two for Jane Smith. Part I should be completed for John Smith by selecting option 2a “Person conducting transaction on own behalf.” The deposit amount ($5,000) should be entered in Item 21, along with the joint account number. An additional Part I will also need to be completed for John Smith because of Jane’s later deposit into the same joint account. Therefore, a separate Part I will need to be completed by checking option 2c “Person on whose behalf transaction is conducted.” The deposit amount ($8,000) should be entered, along with the joint account number. By completing Part I twice for John, the Credit Union accurately documents the $5,000 deposit made by John (transaction on own behalf) and the one also made by Jane for $8,000 (on behalf of John).
The same information will need to be recorded for Jane Smith’s deposit as well. Therefore, Part I should be completed for Jane Smith by selecting option 2a “Person conducting transaction on own behalf.” The deposit amount ($8000) should be entered in Item 21, along with the joint account number. An additional Part I will also need to be completed for Jane Smith because of John’s earlier deposit into the same joint account. In the second Part I, the Credit Union should check option 2c “Person on whose behalf transaction is conducted.” The deposit amount ($5,000) should be entered, along with the joint account number. Again, by completing Part I twice for Jane, the Credit Union accurately documents the $8,000 deposit made by Jane (transaction on own behalf) and also the one made for $5,000 (on behalf of Jane).
This information, along with additional Frequently Asked Questions (FAQs) pertaining to CTRs can be found on FinCEN’s website: Frequently Asked Questions Regarding the FinCEN Currency Transaction Report (CTR).
Additional CTR guidance can be found in the FFIEC BSA/AML Manual – Currency Transaction Reporting as well as in The League’s ii Release No. 0071 – Bank Secrecy Act.