ABA Banking Journal - December 2008 - (Page 40a)

MIB X AL O Who takes anti-money duty when affiliates take cash? Assuming it is possible for customers to make cash deposits at an affiliate’s branches, which bank is responsible for reporting of cash deposits over $10,000—the financial institution where the account is held, or the bank where the deposit is made? For purposes of the CTR requirement, a “financial institution” includes a bank, as well as any agent of a bank. (31 CFR 103.11(n).) Assuming you have an agency agreement with the affiliate bank, either institution can complete the CTR, but to avoid duplication, both should not complete the form. Your agreement with your affiliate should spell out who has the responsibility for completion. Even if the account-holding institution would not receive any cash (e.g., when the cash is processed by the depository bank who then wires or transmits to the account-holding bank) the account holding bank may still complete the CTR if that is what has been decided. Based on what you decide, FinCEN has provided guidance on how the CTR should be completed. http://www.fincen.gov/ news_room/rp/rulings/html/fincenruling2001-1.html Q. A. include showing that the bank has had an active and longstanding relationship with a particular person, evidenced by such things as a history of account statements sent to the person, information sent to the IRS about the person’s accounts without issue, loans made and repaid, or other services performed for the person over a period of time.” (This alternative, however, may not suffice for persons that the bank has deemed to be high risk.) How you do all this should be spelled out in your CIP Policy. When an existing customer opens a new account, it is a good idea to review your deposit account records to ensure that you have all the required information on file and that nothing has changed. If the customer has moved or changed her name due to marriage for example, it is a good idea to update the customer’s information in your records. These is no requirement to track the expiration date of identification relied upon in opening an account. Two questions on BSA policy pieces and where they belong Are we allowed to include our Customer Identification Program policy with our Bank Secrecy Act/Anti-Money Laundering policy? At our last exam, a recommendation was made to combine our BSA policies. Also, should our Red Flags program be a standalone document or can we include it with our CIP or BSA policy? Your CIP is subject to the requirements of 31 U.S.C. 5318(l) and the implementing regulations jointly promulgated by the banking agencies, which require a customer identification program to be implemented as part of your Bank Secrecy Act compliance program. Although your CIP is a separate program under BSA, it is still part of BSA. Your Red Flag Program, however, should be a separate, board-approved program, although it may incorporate controls covered in your BSA or Customer Identification Program (CIP). Getting the facts on photo requirements under Customer Identification Program rules As part of our Customer Identification Program policy, we obtain a copy of a picture ID for all new accounts opened. However, for “known customers” who are opening a new account, do we still have to obtain a copy of picture ID? If we state in our CIP policy that we do not have to obtain a copy of a picture ID each time a “known customer” opens an account, will the examiners accept this? Also, would we have to track the expiration date of the picture ID (such as driver’s license), and make sure we get a new copy whenever the old one expires? First of all, there is no requirement to obtain a copy of any documents used for CIP verification; there is only a requirement to keep a record of the information contained in those documents that you rely upon to identity your customer. According to the CIP final rules, the term “customer” does not include “a person that has an existing account with the bank, provided that the bank has a “reasonable belief” that it knows the true identity of the person.” (31 C.F.R. § 103.121(a) (3) (ii)(C).) The rules clarify that, “Among the ways a bank can demonstrate that it has ‘a reasonable belief’ is by showing that prior to the issuance of the final CIP rule, it had comparable procedures in place to verify the identity of persons that had accounts with the bank as of October 1, 2003, though the bank may not have gathered the very same information about such persons as required by the final CIP rule. Alternative means Q. Q. A. A. “Trading” Community Reinvestment Act credit among friends We are a multibank holding company that owns community banks in different areas of the state. One of our banks (Bank A) made a loan that would qualify as a Community Development Loan. It is not in their assessment area, yet is in the area of another of our banks (Bank B). Can Bank B claim credit for it during their CRA review? There is a general rule against “cherry picking” loans to unduly influence an institution’s CRA performance evaluation. However, the agencies did address permissible sharing in certain cases, such as that stated in Question .22(c)(2)(ii)-2 of the 2001 Interagency Q&A’s (http://www.ffiec.gov/cra/pdf/qa01. pdf) where the affiliates are insured depository institutions subject to CRA. It clarifies, however, that “The method by which loans are allocated among the institutions for CRA purposes must reflect actual business decisions about the allocation of banking activities among the institution and should not be designed solely to enhance their CRA evaluation.” In no event may both institutions receive credit for the same loan. Q. A. Leslie Callaway, CRCM, and Mark Kruhm, CRCM, ABA compliance analysts, and other ABA experts, answer member questions here. Submit questions to: compliance@aba.com. Disclaimer: Our answers do not provide, nor are they intended to substitute for, professional legal advice. http://www.fincen.gov/news_room/rp/rulings/html/fincenruling2001-1.html http://www.fincen.gov/news_room/rp/rulings/html/fincenruling2001-1.html http://www.ffiec.gov/cra/pdf/qa01.pdf http://www.ffiec.gov/cra/pdf/qa01.pdf

Table of Contents for the Digital Edition of ABA Banking Journal - December 2008

ABA Banking Journal - December 2008
Contents
Editor’s Column
Cover Story
ABA Resources
ABA Chairman’s Position
Community Banking
Pass the Aspirin
The Bank that Hates "Customers"
"Ivan the Terrible"Wreaks Havoc, but Adds New Business Line
New Twist on Philanthropy:the "Second-Chance" Account
Risk Management
Tech Topics
Webnotes
Compliance Clinic
MailBox
Banker’s Mart
To Advertise/Index of Advertisers
The Economy

ABA Banking Journal - December 2008

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