Handling Cash Deposits: Bank's Responsibility Explained | First National Bank
Question
Mrs. Evans, a customer of First National Bank, deposits $15,000 in cash to her account. During the transaction, Mrs. Evans explains that she received the money in the mail from her sister in Europe. What responsibility does the bank have?
Answers
Explanations
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A. B. C. D.D
In this scenario, Mrs. Evans, a customer of First National Bank, has deposited $15,000 in cash to her account and has explained that she received the money in the mail from her sister in Europe. This transaction triggers certain anti-money laundering (AML) and Bank Secrecy Act (BSA) requirements for the bank, which are aimed at preventing money laundering and terrorist financing.
The bank's primary responsibility in this situation is to complete a Currency Transaction Report (CTR) and file it with the Financial Crimes Enforcement Network (FinCEN) within 15 days of the transaction. A CTR is a report that must be filed for all cash transactions over $10,000 in a single day involving one person or entity. In this case, Mrs. Evans has deposited $15,000 in cash, which exceeds the $10,000 threshold.
Completing a United States Customs form 4790 (CMIR) is not necessary in this situation because CMIRs are typically used for cross-border transactions involving currency or monetary instruments, such as travelers' checks or money orders, that are being transported into or out of the United States. In this case, the transaction involves cash that has already been brought into the United States.
The correct answer is A, which states that the bank should complete a CTR. Answer B and C are incorrect because they mention the completion of a CMIR, which is not required in this situation. Answer D is also incorrect because it suggests that the bank should encourage Mrs. Evans to file a CMIR, which is not necessary.
It is important for the bank to document and maintain records related to this transaction, including identifying information about Mrs. Evans, the source of funds, and the purpose of the transaction. The bank should also be aware of any red flags or suspicious activity related to the transaction, such as inconsistent or incomplete information, and report any suspicious activity to FinCEN through a Suspicious Activity Report (SAR).
