Assessing Compliance with BSA Regulatory Requirements


Currency Transaction Reporting

Objective.   Assess the bank’s compliance with statutory and regulatory requirements for the reporting of large currency transactions.

1. Determine whether the bank’s policies, procedures, and processes adequately address the preparation, filing, and retention of CTRs.

2. Review correspondence that the bank has electronically received from FinCEN's BSA E-Filing System (refer to Appendix T for additional information on filing through the BSA E-Filing System). Determine whether management has taken corrective action, when necessary.

3. Review the currency transaction system (e.g., how the bank identifies transactions applicable for the filing of a CTR).  Determine whether the bank aggregates all or some currency transactions within the bank.  Determine whether the bank aggregates transactions by taxpayer identification number (TIN), individual taxpayer identification number (ITIN), employer identification number (EIN), or customer information file (CIF) number.  Also, evaluate how CTRs are filed on customers with missing TINs or EINs.

Transaction Testing

4. On the basis of a risk assessment, prior examination reports, and a review of the bank’s audit findings, select a sample of filed CTRs (hard copy or electronic format) to determine whether:

  • CTRs are completed in accordance with FinCEN instructions.
  • CTRs are filed for large currency transactions identified by tellers’ cash proof sheets, automated large currency transaction systems, or other types of aggregation systems that cover all relevant areas of the bank, unless an exemption exists for the customer.
  • CTRs are filed accurately and completely within 15 calendar days after the date of the transaction.
  • The bank’s independent testing confirms the integrity and accuracy of the MIS used for aggregating currency transactions.  If not, the examiner should confirm the integrity and accuracy of the MIS. 
  • The examiner's review should assess whether tellers have the capability to override currency aggregation systems. If so, the examiner should review controls in place to ensure the override capability is used appropriately. Controls may include supervisory approval, generation of exception reports, and BSA officer and internal audit review of exception reports.
  • Discrepancies exist between the bank’s records of CTRs and the CTRs reflected in the BSA-reporting database.
  • The bank retains copies (hard copy or electronic format) of CTRs for five years from the date of the report ( 31 CFR 1010.306(a)(2)).

5. On the basis of examination procedures completed, including transaction testing, form a conclusion about the ability of policies, procedures, and processes to meet regulatory requirements associated with currency transaction reporting.


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