General rule and definitions

You must file a report for every “transaction in currency” in which your institution is involved where the amount of currency exceeds $10,000. [31 CFR 1010.311] “Currency,” under the regulations, is United States coin and paper money and that of any other country if it is legal tender, circulates, and is accepted as a medium of exchange in that country. The term “currency” also includes U.S. silver certificates, U.S. notes, and Federal Reserve notes. And it includes official bank notes from other countries if they are customarily used and accepted as a medium of exchange in that country. [31 CFR 1010.100(m)] A “transaction in currency” is the physical transfer of currency from one person to another. [31 CFR 1010.100(b)(2)] So a “transaction in currency” occurs, for example, when someone deposits currency into or withdraws currency from his or her deposit account. Deposits of checks, wire transfers, electronic transfers, etc. which do not involve the physical transfer of currency are not transactions in currency.

The amount of currency involved in the transaction must exceed $10,000 before it is subject to the reporting requirement. Multiple transactions that result in cash in or cash out of more than $10,000, in any one business day, should be treated as a single transaction if you have knowledge that the transactions are by or on behalf of any person. [31 CFR 1010.313(b))] (A “person,” for purposes of these regulations, is an individual, a corporation, a partnership, a trust or estate, a joint stock company, an association, a syndicate, joint venture, or other unincorporated organization or group, and all entities cognizable as legal personalities. [31 CFR 1010.100(m)])

Deposits made at night or on a weekend or a holiday should be treated as made on the next business day following the deposit for purposes of deciding the amount of currency transactions in any one business day. [31 CFR 1010.313(b)]

The Federal Deposit Insurance Corporation (FDIC) has determined that one situation you might encounter is not the sort of multiple transaction that would require a currency transaction report (CTR). In Financial Institutions Letter 74-92 (October 23, 1992), the FDIC stated that no CTR is required where a number of employees cash payroll checks on the same day drawn on the same employer’s account, where none of the checks exceeds $10,000 but the total of cashed checks does exceed $10,000. Each check cashing is considered a separate transaction made by or on behalf of each of the different employees. However, a CTR is required for individual check cashings which do exceed $10,000, and a CTR would be required if a single employee cashed a number of checks on behalf of himself/herself or other employees and the checks totaled over $10,000.

See FinCEN Ruling 2001-2, August 23, 2001.

Effective July 1, 2012, filing of most reports required by FinCEN must be done electronically. A financial institution that files a report, such as CTR, must register as an E filer by visiting the following link: http://bsaefiling.fincen.treas.gov/main.html.

Form BSA-ADD can be used to gather necessary currency transaction reporting information from customers “up front” when the customer is opening an account. It is especially useful for customers who will frequently be making reportable currency transactions.

Generally speaking, when a Form 104 is required, you must follow the form’s instructions and fill out the form completely. Sometimes, you may not have all the information requested by the form. This might be the case where a deposit is made by mail or at a night depository or automated teller machine (ATM), or where multiple transactions in a single day total more than $10,000. The form provides options for indicating why your report lacks requested information. According to Treasury Department Administrative Ruling 92-2, if the reason is “multiple transactions,” you must make a “reasonable effort” to obtain the missing information (e.g., contacting an account holder, etc.).

An exception to the rule that Form 104 must be filled out completely exists for certain transactions with federal, state, or local law enforcement agents. The Treasury Department announced this exception in February of 1991, recognizing the fact that law enforcement agents, particularly those in the drug enforcement area, frequently deal with large amounts of cash while at the same time needing confidentiality because of the undercover nature of their work.

In order for the exception to apply, the financial institution must verify that the customer is a law enforcement or revenue officer or IRS revenue officer by examining the individual’s agency badge or official credentials.

If the financial institution does this, then the institution may record the government agency’s employer identification number instead of the agent’s social security number in Form 104. Also, the institution may record the agency’s address rather than the home address of the agent. Finally, the financial institution must record the words “official badge” or “official credentials” in Item 14 (identity verification document), the agency name in Item 14e (issuer of identification verification document), and the badge or credentials number in Item 14f (identification verification document number).

These special rules apply only to reports filed by “banks,” as defined by the Treasury regulations (which includes commercial banks or trust companies, private banks, thrift institutions, building and loans, savings banks, industrial banks, credit unions, and other institutions chartered under state law and supervised by bank supervisory agencies). “Nonbank” financial institutions must fill out Form 104 according to its instructions.

You should also be aware that you have the option of exempting from the reporting requirements all cash transactions with government agencies if certain conditions are met. See the section later in this chapter entitled “Exemptions” for details on your authority to exempt transactions with certain entities. If the agent making the transaction works for an agency you have already exempted, then no transaction report is required in the first place.

The special rules for transactions with law enforcement officers are not yet in the form of regulations. The Treasury Department issued them in an announcement dated February 27, 1991. However, the Treasury indicated in the announcement that the rules are in effect and would eventually take the form of regulations.