FinCEN Provides Modest Reporting Relief for Banks Using Armored Car Services

by Ballard Spahr LLP
Contact

FinCEN has issued a new ruling that will provide some relief from certain transaction reporting requirements for banks and other financial institutions using armored car services (ACS). FinCEN regulations require a financial institution (FI)—a term referring to the banking, broker-dealer, money service, and mutual funds businesses—to file a Currency Transaction Report (CTR) when it has knowledge that one or more transactions by or on behalf of any person result in either cash-in or cash-out totaling more than $10,000 during any business day. This obligation extends to transactions involving ACS.

Under a 2009 administrative ruling, it made no difference whether the ACS conducted transactions that debited or credited the account of an FI’s customer based on instructions from the FI, from the customer, or from a third party. FinCEN’s new ruling, issued July 12, 2013, has made modest changes its 2009 ruling.

The 2009 ruling required an FI

  • to collect the name, date of birth, and identification information of the ACS employee making the delivery or pickup; and
  • to complete a CTR indicating multiple transactions, if applicable, for each ACS employee who, on any business day, delivers or picks up cash in one or more transactions totaling more than $10,000 in the aggregate, and to list all customers included in the ACS transactions, regardless of the size of each customer’s contribution to the aggregate amount.

The industry has expressed concern about the practical difficulties of compliance with these requirements, especially in differentiating transactions conducted by a given ACS on behalf of an FI from transactions by the same ACS on behalf of a customer within the mandatory 15-day CTR filing period.

The new FinCEN ruling supersedes the 2009 ruling and grants a limited exception applicable only to reportable transactions conducted by an ACS to debit or credit the account of an FI’s customer pursuant to instructions received from the customer or from a third party (as opposed to similar transactions where the instructions came from the FI itself). The new ruling requires FIs to implement adequate procedures to determine the source of the instructions (FI, customer, or third party) and, armed with that information, to complete CTRs as follows:

  • Deliveries and pickups on any given day will be aggregated with all other currency transactions performed on that same day on behalf of the same customer.
  • An FI with knowledge that this aggregate exceeds $10,000 must file a CTR identifying the customer and all persons conducting transactions about whom the institution has obtained identifying information (including the ACS and, where applicable, third parties on whose instructions the ACS conducted transactions).
  • Where the ACS has made deliveries or pickups in excess of $10,000 on any one business day, the FI satisfies the CTR identification requirement by simply filling in the ACS’s corporate information (corporate name, address, EIN, etc.); filling in the name of the ACS employee is not required.
  • The FI’s reporting obligation is satisfied by filing CTRs aggregated by customer only.
  • If, in spite of implementing adequate procedures, the FI is unable to determine within the 15 days allowed for CTR filing under whose instruction a specific ACS reportable transaction was conducted, the FI may satisfy its CTR obligation by identifying its customer and the corporate information of the ACS that conducted the transaction.

The new FinCEN ruling is effective immediately. FIs that need to modify their systems to file CTRs in accordance with the new ruling, however, have until September 30, 2013, to do so. The ruling does not affect an FI’s continuing obligation to file a suspicious activity report (SAR) if the institution knows, suspects, or has reason to suspect that a transaction is intended to circumvent any Bank Secrecy Act requirement or any other reporting requirement under federal law, or has no apparent lawful or legitimate business purpose.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ballard Spahr LLP | Attorney Advertising

Written by:

Ballard Spahr LLP
Contact
more
less

Ballard Spahr LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.