BANK SECRECY ACT AND PART 326

Compliance Manual

Who/what is exempt from the reporting requirements under the Financial Recordkeeping Act?

Transactions with Federal Reserve Banks or FHLB.
Transactions between domestic banks.
Nonbank financial institutions transactions with commercial banks (not vice versa!).

A bank may exempt:

deposits/withdrawals of currency from an existing account by an established depositor who is US resident and operates a retail type of business in US
Deposits/withdrawals of currency - sports arena, race track, amusement park, bar, restaurant, hotel, check cashing service, vending machine company, theater, passenger carrier or public utility.
Dep/with, exchanges of currency or other payments and transfers by local or state governments or US/agencies.
Withdrawals for payroll purposes from existing account by established depositor, US res., and operates firm that regularly withdraws more than $10M in order to pay its employees in currency.

Transactions by a bank with nonbank financial institutions other than the US Postal Service & check cashing services (casinos, currency exchanges, issuers of traveler's checks, securities brokers & dealers)
Transactions between domestic banks & foreign banks
Transactions by a bank with commodities dealers or brokers
Motor vehicles, vessels, or aircraft dealers
Foreign government agencies, instrumentality, office, embassies & consulates

What should be included in a BSA program? (Compliance)

(1) provide for an ongoing system of internal controls to assure ongoing compliance.

(2) Provide for independent testing for compliance to be conducted by bank personnel or an outside party

(4) Provide training for appropriate personnel

CTRs:

file for transactions > $10M

for the physical transfer of currency

Money Laundering:

placement

layering

integration

Payable through accounts:

foreign bank customers have direct access to US banking system

PART 326: MINIMUM SECURITY DEVICES AND PROCEDURES AND BANK SECRECY COMPLIANCE

BSA compliance program shall at a minimum:

provide a system of internal controls to assure compliance

provide for independent testing

designate personnel for day-to-day responsibility

provide training