Tracking Internal Funds Transfers

Question: We are presently using a spreadsheet for tracking internal funds transfers between our customers involving $3000 or more, and keeping the records on file. My question is - is this necessary or not? In looking at the reg, my confusion lies with whether funds transfers means only to other institutions or does it apply to internal funds transfers also? We also maintain a spreadsheet for wire transfers - incoming and outgoing.

Answer: The funds transfer recordkeeping rules do apply to internal transfers from one account to another, but I'm not sure an entire new internal tracking system would be required. Logic tells me that most, if not all, of this information already resides within the bank. The rule says that there must be a record that is maintained (for at least five years) and retrievable which shows

1. name of the institution;
2. the name and account number of the transmitter (the person placing the wire transfer order);
3. the transmitter's address; the execution date and amount of the transfer;
4. the name of the receiving institution (which, in this instance, is the sending bank since it is an internal transfer; and
5. other information about the receiving institution and the receiving institution's customer

Again, in this instance, the receiving institution and the sending institution are the same and the bank will clearly have this information about its own customers.

In short, I would guess the bank already has all of this information on hand. The requirement to retrieve the information can be met by having records within the bank that will point to all of this information - even if those records are not available in one location.

Our thanks to the Law Offices of Peter Djinis, McLean, VA, for this response.

Copyright © 2002 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 12, No. 8, 10/02