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FinCEN broadens CTR exemptions
WASHINGTON (12/5/08)— The Financial Crimes Enforcement Network (FinCEN) has simplified its rules for depository institutions to exempt eligible members or customers from currency transaction reporting as required under the Bank Secrecy Act (BSA). “These regulatory changes will make it easier for financial institutions to take better advantage of exemptions from CTR filing requirements for certain classes of customers, while continuing to report valuable information to law enforcement," said FinCEN Director James Freis in a release. "FinCEN also made improvements to our proposed rule based on valuable industry feedback received during the comment period," Freis added. FinCEN’s plan to simplify the regulatory exemption requirements is primarily based on recommendations from a Governmental Accountability Office (GAO) study on the current CTR exemption regime. The Credit Union National Association backed FinCEN’s improvements and called them “a good first step for a more efficient and effective reporting structure under BSA.” The final rule makes the following changes to the current CTR exemption system:
* Depository institutions will no longer be required to review annually or make a designation of exempt person (DOEP) filing for depositors who are other depository institutions, U.S. or state governments, or entities acting with governmental authority; * Depository institutions will be able to designate an otherwise eligible non-listed company or a payroll customer after either two months time, down from the previous one-year requirement, or after conducting a risk-based analysis of the legitimacy of the member’s or customer's transactions; * FinCEN's guidance on the definition of "frequent" transactions will be changed to five transactions per year instead of the current eight transactions per year; * Depository institutions will no longer be required to biennially renew a designation of exempt person filing for otherwise eligible Phase II customers, but an annual review of these customers must still be conducted: and * Depository institutions will no longer be required to record and report a change of control in a designated non-listed or payroll member or customer.
The new rules take effect 30 days after publication in the Federal Register. Use the resource link below to access the final rule.
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