Over the last week, FinCEN updated their CTR Frequently Asked Question (FAQ) # 16 - for the third time in recent days.
As we reported previously in this video, a few weeks ago FinCEN started the process of changing how they want CTR filers to complete CTRs when a person has multiple “roles” in the transaction. Initially, FinCEN updated CTR FAQ 16 with a new answer, but then reverted to the original answer to FAQ 16 after apparent multiple calls from bankers questioning this change (that did not have an associated announcement or even changes to the CTR instructions).
This week, we have received reports that FinCEN released a statement in their BSA E-Filing Notification System that it has updated the instructions for reporting CTRs when an individual has multiple roles. A few days after this statement, FinCEN apparently updated their answer to CTR FAQ 16 to align with this. The interesting thing is that the new answer for CTR FAQ 16 is slightly different than the original version that was briefly available on FinCEN’s website a few weeks ago.
The new version of CTR FAQ states the following:
Question: What if more than one “role “ (Item 2) applies to the person being listed in Part I?
Answer: If more than one Item 2 option applies to a Part I person, a separate Part I section will be prepared on that person for each Item 2 option. For example, if the Part I person conducted a $5,000 deposit into their personal account and a separate $7,000 deposit into the account of another person/entity, there will be one Part I on that person reporting option 2a on the personal deposit with that amount and account number in Item 21 “Cash in amount”. There will be a second Part I on that person reporting option 2b on the person/entity account transaction with that amount and account number in Item 21.
As you may recall, the previous answer to FAQ 16 stated that only one Part I would be completed for persons with multiple roles, though the Item 2 option selected was sort of based on a hierarchy (i.e. choose the farthest left option that applies). As the new answer now requires multiple Part I sections, CTR filers will need to talk with their vendors to ensure this change can be made. In their apparent release this week, FinCEN has apparently listed a target date of October 1, 2019, with a mandatory effective date of February 1st, 2020.
As you might expect, this topic will be covered in our next Quarterly Compliance Update. A tentative curriculum for this program can be found here.
Watch this video for a full explanation of the change in answer on FAQ 16. (Note: the answer shown in this video for FAQ 16 is slightly different from the final answer (listed above) as this referenced video was based on the first version of the new answer, which has been replaced by the current version listed above.
The CTR FAQs can be found here.
