We just started banking a guy who owns his own ATM. I've looked everywhere and can't find a reference for whether he is eligible for CTR exemption. I'm tracking him on my BSA log, but it now occurs to me that maybe owning an ATM makes him a MSB. Help?
Go to [url=http://www.ots.treas.gov/docs/4/480192.pdf]http://www.ots.treas.gov/docs/4/480192.pdf This is the OTS site, but don't worry, the manual is FFIEC, so it makes no difference which site you get it from.
Then go to pages 215 through 219. Then go to pages 292-294. After reading these, you may have second thoughts about keeping the account, much less trying to exempt it.
If at first you don't succeed, keep your resume handy.
I am wondering if the same type of monitoring is required when you have a business account for, lets say a convenience store and while conducting a review of that high risk business you see transactions that let you know they have an ATM. The account is not identified as an ATM account so would we be required to do the same due diligence for this customer?
Is there an easy way to identify these type of customers other than reviewing all transaction histories? I know we probably have a large number of convenience stores / gas stations that also have ATMs but we have not identified them.
To original poster-what is the customer's primary business?
Our bank used to have privately-owned ATM accounts, but we eliminated them!
Based on our policy and procedures and the BSA examination manual, the bank must obtain the basic documents such as monthly statements from the merchant processing company for all ATMs the customer owns (or services), lease agreements (or contracts) of ATM installation, and the most recent tax returns. Tax return will show the gross and net amounts that the ATM business owner generated from the surcharge income for the corresponding period.
To mitigate the risks involving the privately-owned ATMs,the Bank must:
-Verify ISO's legitimacy through a review of corporate documentation, licenses, permits, contracts, or references
-Review public databases to determine the existence of issues with the ISO or principal owners
-Understand the currency servicing arrangements for privately-owned ATMs and whether legitimate currency generation is sufficient to service machines
-Document the locations of privately-owned ATMs and determine the ISO's target geographic market.
-Document in Customer Account Profile, expected account activity, including currency withdrawals
ATM business, regardless of its size, must be classified a "High Risk" and the bank must conduct due diligence on these ATM accounts periodically.
Would you like to do that? I wouldn't. That's why we closed all ATM accounts. FDIC is our regulator and they always ask us whether we have any ATM accounts or not. I'm sick and tired of doing this.
Delight thyself also in the LORD; and he shall give thee the desires of thine heart. (Psalm 37:4 KJV)
Operating a private ATM does not make him an MSB. On the question of CTR exemption, I am not sure if he would qualify but, even if he dis, I wouldn't do it.
No, he's got about 11 months to go.
Two points: 1) A private ATM owner could be considered an agent of a financial institution and thus ineligible. 2) It is a mistake to exempt a high risk customer and thus minimize the scrutiny they receive. Private ATM owners are singled out as high risk in the BSA examination manual - "Privately owned ATMs are particularly susceptible to money laundering and fraud."
My employer will rapidly disavow any connection of any kind to any posting I have made or may now or in the future make.
I actually have a guy exempt right now that owns about 30 ATM's. The FDIC just came in and questioned it and I was right. They are NOT a considered an agent of a financial institution. All they (FDIC) wanted was a financial statement and a list of the ATM's he operates (so they could feel better), which I already had in the file. It beats doing a CTR every single day. If you exempt them, be prepared for the FDIC to question it, but you are completely OK by doing it. I use Patriot Officer for CTR's and I can pull cash trends for the client (which were also in the file) so they could see that the customer's cash flow stays pretty level. If it were to start to fluctuate, then we'd contact the customer for a good explanation.