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Letter: Understanding Bank Transaction Reporting in the U.S.

Dear SurvivalBlog Readers:
I have noticed over the last few weeks a couple of articles discussing banking and transaction reporting etc. I would recommend (if one is having trouble sleeping at night) that everyone who is interested read the audit manuals for the Bank Secrecy Act (BSA), which includes currency transaction reporting (CTR), suspicious activity reporting (SAR), and monetary instrument logs (MIL). Bank’s are required by law to perform these on all customers based on activity and the bank’s teller system analysis. Most people know about CTRs – deposit or withdraw more than $10,000 in cash – but they do not know about SARs or the monetary instrument tracking. Since I audit banks and consult on internal controls for a living, I thought I would discuss the monitoring and reporting process of each.

In closing, I would say that it is preferable to have a CTR filed in place of a SAR. If you think you can structure items, you usually can’t. Banks pay a lot of money to have systems that literally do nothing but monitor patterns and transactions. Most will look at 15-30 days minimum for structuring and odd behavior. The big boys play with software that look through months and years of data. Structuring is not treated kindly at all and will earn you a SAR. Another bit of advice would be to divulge as little information as possible to any teller, bank employee, or other customers. Bank employees, from the president down to the new teller, are trained regularly on how to extract and watch for information for CTR and SAR transactions. The training is required by regulations, so even the one branch community bank does it. Don’t EVER mention that you are trying to avoid any reporting or regulation, or talk negatively about the government to bank employees. Both of these will almost always earn you an
automatic SAR or a review by the BSA Officer and committee. Showing a high level of knowledge of banking regulations could also possibly earn you a review by the BSA officer, or an upgrade to your account risk rating. Be pleasant and nice, but do not chat up the teller, your loan officer, or any one else. Even if another customer mentions that you have said something while in line to the teller, that could also get you on the short list. All of this sounds very intrusive and aggressive, but it is not the banks’ fault. Most of them hate doing it, but the federal regulators will fine them if it is discovered they are not reporting. The best way to avoid it is to continue as you normally would, be low profile, and don’t try to hastily get around the system. It is designed exactly for that reason.

Regards, – The Auditor