Bank's Action for CRCM Exam
Question
The manager of Main Street branch calls and relates the following information: John Smith purchased a cashier's check for $1,000 cash at 10:00 a.m. on
Tuesday. At 11:30 a.m. Mr. Smith returned and purchased a cashier's check for $2,500 cash and deposited traveler's checks totaling $9,000 into his checking account. At 4:00 p.m. Mr. Smith returned and deposited $8,000 cash into his checking account. This deposit was after normal banking hours, so it was recorded as of Wednesday's business date. What action should the bank take?
Answers
Explanations
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A. B. C. D.D
The scenario given in the question involves multiple transactions conducted by the customer, John Smith, in a single day at the Main Street branch. The bank needs to determine if any of these transactions trigger the reporting requirements under the Bank Secrecy Act (BSA) and its implementing regulations, specifically the Currency Transaction Report (CTR) filing requirement.
A Currency Transaction Report (CTR) is a report filed with the Financial Crimes Enforcement Network (FinCEN) by financial institutions for transactions involving currency (i.e., cash) in excess of $10,000 in a single business day by or on behalf of any person. The purpose of the CTR is to help detect and prevent money laundering, terrorist financing, and other financial crimes.
In the scenario provided, the first transaction was for a cashier's check of $1,000 purchased with cash. This transaction, by itself, is not reportable because the cash amount involved is less than $10,000.
The second transaction was for a cashier's check of $2,500 purchased with cash, and traveler's checks totaling $9,000 deposited into Mr. Smith's checking account. The total amount of cash involved in this transaction is $11,500, which exceeds the $10,000 threshold for filing a CTR. Therefore, the bank should file a CTR for this transaction.
The third transaction involved a deposit of $8,000 in cash into Mr. Smith's checking account after normal banking hours, which was recorded as of Wednesday's business date. This deposit is not reportable because it was not made in a single business day.
Therefore, the correct answer to this question is B: File a Currency Transaction Report (CTR) for $11,500. Option A is incorrect because it is based on the assumption that the $11,500 was not reached in a single transaction. Option C is incorrect because the monetary instrument sales log is only used to record sales of monetary instruments (e.g., cashier's checks) in excess of $3,000, and the $9,000 in traveler's checks deposited into Mr. Smith's checking account is not a sale of a monetary instrument. Option D is also incorrect for the same reason as Option C.
