Question & Answer

Question: In one of your seminars, you said that if the joint owner of an account came in to make an over $10,000 cash deposit, we had to list the other owner of the account in the "on behalf of" section of the 4789. Could you please tell me where it says we have to do that?

Also, you mentioned that if we had a suspicious transaction we had to file a Criminal Referral Form even if the deposit was under $10,000. Where do we get the Criminal Referral Form? Nobody we talked to at IRS knew what we were talking about.

Answer: The information on the first part of your question came from the Office of Financial Enforcement in Washington. We call there when we get a question of any kind on Bank Secrecy Reporting. They are very helpful, and often supply us with administrative rulings.

The Criminal Referral Form (CRF) comes from your regulatory agency, whether FDIC, OTS, OCC, NCUA, or the Federal Reserve Bank. The "Short" form is to be used if the transaction or the violation is under $10,000. The "Long" form is to be used if it is over $10,000.

If the long form of the CRF is used for suspicious transactions over $10,000, you will, of course, also file a 4789 (Currency Transaction Report).

If the short form is used, sources in Washington say you probably should not file a 4789, because it is not required for an under $10,000 transactions. Because it is not required, you may be breaching financial privacy if you give information on a 4789 about a customer to a government agency.

But in the case of a suspicious transaction of under $10,000, because the Criminal Referral Form is required, it is not a violation of financial privacy.

There are two developments you should be aware of regarding suspicious transactions and the filing of Criminal Referral Forms.

First-there is a new CRF being developed by all of the federal agencies concerned. We now have the final draft, which is out for public comment. This will be a common form for all regulators and law enforcement agencies. We'll let you know when it will be available for use.

In the meantime, if you do not have a current CRF, and have been unable to obtain one from your regulator, call our office and we'll send you one. We have long and short forms from all the regulators. Second-There is an amendment in the Housing Bill signed by President Bush that provides "Civil Safe Harbor" to any financial institution that files a Criminal Referral Form. What that means is this-if you file a CRF on a customer and it turns out that the customer is not laundering money, or evading taxes, or some other equally dastardly thing-the customer cannot sue you for filing the CRF. The safe harbor legislation protects you from civil suit.

Copyright © 1992 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 3, No. 7, 12/92