Partner in crime: A CTR refresher

One is the loneliest number. That’s why sometimes criminals team up and break the law with a partner. There are several famous criminal duos throughout U.S. history, like Butch Cassidy and the Sundance Kid, Bonnie and Clyde, or Walter White and Jesse Pinkman in Breaking Bad (okay, that last pair is fictional). It’s possible that your credit union may encounter joint account owners that staff believe are working together to engage in illegal financial activity. How should credit unions handle Currency Transaction Report (CTR) requirements in such situations?

Let’s examine some CTR basics. Section 1010.311 of the FinCEN regulations requires a credit union to file a CTR for each “deposit, withdrawal, exchange of currency or other payment or transfer” which involve more than $10,000 in cash. Section 1010.313 describes when a credit union should aggregate multiple transactions together, including transactions conducted by different people. According to that regulation, cash transactions can be treated as a single transaction if they were made in a single business day and were made “by or on behalf of” the same person. Additionally, FinCEN has noted in a FAQ regarding CTRs that credit unions should look at the total of withdrawals or deposits separately and should not offset one category against the other. The FAQ discusses CTRs for joint accounts in questions 23 and 24:

Question 23 in the FAQ linked above addresses deposits made into a joint account, and states “[w]hen a deposit is made into a joint account, the deposit is presumed to be made on the behalf of all account holders because all account holders have potential access to the account balance…” (emphasis added). Let’s take the example of a married couple with a joint share account. This would mean that cash deposits by the wife may be presumed to also be “on behalf of” the husband, and vice versa. This can be helpful for aggregation purposes when cash deposits are made by both spouses. For example, if the wife deposits $6,000 in the morning, and then the husband deposits $5,000 in the afternoon on the same day, section 1010.313 would require those transactions to be aggregated together because they are “by or on behalf of” each spouse. The total would be $11,000, thus requiring the credit union to file a CTR.

 

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