Compliance with Financial Recordkeeping and Currency Reporting Regulations for Cash Purchase of Travelers' Checks

What Information Must Be Part of the Bank's Records for a Transaction Involving Cash Purchase of Travelers' Checks?

Prev Question Next Question

Question

A compliance officer is constructing a review of a transaction in which M, a deposit account customer, used cash to purchase travelers' checks in an amount of

$4,000. The compliance officer must determine compliance with financial recordkeeping and currency reporting regulations. Which of the following pieces of information must be part of the bank's records for this transaction?

Answers

Explanations

Click on the arrows to vote for the correct answer

A. B. C. D.

C

In this scenario, the compliance officer is reviewing a transaction in which a deposit account customer, M, used cash to purchase travelers' checks worth $4,000. The compliance officer needs to determine compliance with financial recordkeeping and currency reporting regulations.

The regulations that apply to this transaction are commonly referred to as the Currency Transaction Reporting (CTR) and Currency Transaction Recordkeeping (CTR) regulations. These regulations require banks and other financial institutions to report certain transactions to the Financial Crimes Enforcement Network (FinCEN) to help prevent money laundering and terrorist financing.

The CTR regulations require banks to report any cash transaction that exceeds $10,000 in a single day. In this scenario, the transaction is only $4,000, so it does not trigger a CTR report. However, the bank is still required to comply with the CTR recordkeeping requirements.

The CTR recordkeeping regulations require banks to maintain certain information about transactions involving currency, including the purchase of travelers' checks. Specifically, the bank must maintain the following information:

  1. The name and address of the individual conducting the transaction (in this case, M)
  2. The date of the transaction
  3. The type and amount of currency involved (in this case, travelers' checks worth $4,000)
  4. The identity of the person conducting the transaction on behalf of the customer (if applicable)
  5. The purpose of the transaction (if known)

Based on the options provided, the only piece of information that must be part of the bank's records for this transaction is the serial numbers of the travelers' checks purchased (option C). While the other pieces of information (M's date of birth, M's deposit account number, and the name of the branch where the transaction occurred) may be useful in certain circumstances, they are not required by the CTR recordkeeping regulations for this type of transaction.

Prev Question Next Question