Depository Institutions 2017-12-24T21:12:55+00:00

Depository Institutions

As a depository institution you and your employees should know the AML/BSA, money laundering and cash reporting issue better than any other industry.  But the truth of the matter is that many do not know it nearly as well as they should.  Not that you don’t have an AML Program or you have not conducted BSA training for your employees.  But, the main reason banks have occasional problems is because they have one of the highest employee turnover rates compared to other industries, especially the larger ones and are constantly training new employees and many times that training falls very short of what it should be.  Some of the most cost effective training conducted by banks is electronically on the computer, but this may be some of the most inefficient training, because many tellers forget most of the material shortly after completing the training and often times the answers are not their own.  In addition, many have stated that the material and questions are so basic and easy that you really don’t have to know the material in order to come up with the correct answer.  That is coming from bank management and tellers, not me.

I conducted AML/BSA training for banks (thousands of tellers), mostly in Louisiana and some in Mississippi and Alabama, for most of my 28 year career, so I am a firm believer in face to face training.  The reason is because Louisiana has not had a bank heavily fined or prosecuted for AML/BSA issues since about 1984.  Now I can’t say with 100% certainty that face to face training was the reason, but I would like to think that it had a lot to do with it.  That can’t be said for many other states that have not had the face to face training.  I have seen and reviewed many online training courses and have reviewed written training materials or heard training performed from upper management and although these methods and material will teach your employees the basics of what they are required to have or what is required in monthly refresher training, in most institutions, they will not give them what they really need to know.  And it cannot compare to face to face training by someone who has worked and prosecuted money laundering cases for more than 25 years and can discuss actual situations that have taken place inside of banks and other businesses.


Money Service Businesses (MSBs)

The reason mostly large banks refuse to open or maintain an account for an MSB is because for years it has been preached to banks (mostly by the Government – law enforcement and regulators) that they should shy away from MSB accounts.  While I was an agent, I was as guilty as anyone, because that’s what was drilled into out heads.  MSBs were supposedly known for laundering money.  It’s much different now that I am on your side.  And in the past year the same problem has surfaced for the precious metals industry, which I will address below.  The individuals or agencies who made and are still making these statements have no idea what they are talking about.  For instance, most MSBs only cash checks and have been rejected by many banks around the U.S., when they are the lowest risk of any industry.  The reason for the low risk is because the only way of laundering money through a check casher is for them to use illegal proceeds to cash the checks, therefore it would be necessary for the owner of the business to be involved.  However, that would be very easy for any bank to detect, because the MSB account would only show deposits (checks cashed) and no withdrawals of cash (because they are using illegal monies to cash the checks).  So, if a check casher is withdrawing cash (cashing a check) for about the same amount as the cashed checks he is depositing, it is virtually impossible for them to be laundering money.  Because the “bad guy” does not take money out of a bank, their objective is to get money into a bank.  There are many other industries I would have concern with before most MSBs, especially check cashers.  If the MSB has their own in-house money transmitting capabilities (other than Western Union or Money Gram), then I would be concerned.

I have given a presentation to banking groups concerning MSBs “Everything you wanted to know about MSBs, but was afraid to ask.”  I am available to conduct the same presentation for your banking group.  Previous banking groups have learned a lot and many have begun accepting MSB accounts, as long as the MSB is willing to become fully compliant and give the bank an updated AML Plan and an independent audit report annually.

If your bank should require more information concerning MSB account holders, please feel free to contact me.  You should also review the money services business page.  I can set your mind at ease when it comes to MSBs.

I believe that by now everyone in a bank should know what is required concerning the preparation of a CTR.  The CTR has changed many times since it originally came out in the early 1970s.  The number of these forms filed since 1975 (3418) has increased dramatically over the years (millions filed each year).  There are many banks who still file CTRs for some transactions of $10,000 or less.  If you are one of those banks, you are risking your financial future.  This practice should never be followed, especially now that you have a SAR available for these situations.  If you think about filing a CTR for $10,000 or less there must be something suspicious about that transaction.  If so, you should be filing a SAR, not a CTR.  With the SAR, as long as it is filed in good faith, you have “Safe Harbor” protection from civil liability.  You have no such protection with the CTR (of $10,000 or less).  The government will tell you that they want you to file a CTR, regardless of the amount, any time you feel the need.  I did and said the same thing when I worked for the government.  However, the government will not be there to assist with your legal bills when you get sued by one of your customers.  I don’t work for the government any longer, so I will tell my client what I believe is in their best interest.

If you desire more information or a more detailed explanation concerning what I have discussed on this web page, please contact me.  I will reply as soon as possible.

Also, if you should have general questions concerning a transaction, CTR, SAR or other issue, please feel free to contact me.