We currently cash checks drawn off of our bank for non-customers. We require all ID information, and if the check is over $500 we require the persons SS# to run OFAC.
Recently we have been told that we should be somehow running OFAC on these people for 6 months.
Has anybody else heard of anything like this? Thanks!

I have not heard this.

We also run OFAC on non-customers at the time of the transaction.

What, you haven't been checking payees for the last six months!!! OMG!!!




Whoever told you there was a legal requirement, then or now, is simply wrong. OFAC compliance; i.e. checking the list, is risk based. You can do it in this instance. You cannot do it. It's up to you.

Armed with a written OFAC risk assessment that indicates your institution is low risk, you can respond to any third party reviewer with the obvious: "We acknoweldge the risk and we accept it because it is immeasurably low; i.e. this is a waste of time."

What purpose would it be to run them? You can not hold funds that are gone. Other then a "request" from your regulator ask for a cite.

The only 6-month compliance issue is checking non-customer cashier's checks over $3000 during the 314A bi-weekly check.

Our Board passed a resolution that they accepted the risk for cashing payroll checks under $1,000 without checking them against the list.

In years of of checking we had never had a confirmed match.
We are geographically in a low risk area.
If they're on the list they are not likely to be employed.

Our BSA auditor commented that he didn't understand why more banks in our situation didn't do something similar. I was expecting a fight but his only suggestion eas that we consider increasing the limit to $2,000.

Thank you everybody! We thought it was a bit odd and were trying to figure out why on earth we would be doing that! Didn't think that it really seemed rational! Thanks for your help!

Hi, Cornhusker - are you selling the cashiers checks to non-customers or just cashing them?

I'm sorry I was not clear. Selling Cashier's checks to non-customers. If we do that we put them on the biweekly review list (314a) for six months. I'm tired and can't cite the source. But our auditor lists in their manual as a six-month requirement.
That would be BCC. Page 448. June 2011 edition.

Go to the 314(a) website and print off the search requirements and give it to the auditors. Unless these non-customer sales are for cash/currency, they are dead wrong.

Well I thought that was understood. Yes it's all about cash in this case.

We are having a discussion regarding cashing checks drawn on us for non-customers. I've read in other places on here that an OFAC check isn't required, but there are obvious risks if we don't detect someone. I read that some banks don't OFAC non-customers for any check cashing under $1,000. What is the cost for violations? I'm just wondering what the purpose of setting a limit would be if we would still be in violation for any transactions under the limit.

It should be risk-based for your institution. Have you ever had an OFAC hit? Do you routinely deal with high risk countries? How well is your BSA Program structured to "know your customers"?

We do not run OFAC on cashiers check payees or checks written from our customers to non-customers. We have determined our risk to be extremely low. And like you hinted to, a $ limit doesn't matter, you can get fined for any amount.

We do conduct OFAC on wires, but we also have an "exempted" list that includes local Title Companies and any Phase I CTR exemptable type customer (another financial institution, a company on the NASDAQ ... etc ...)

The thought process being, if we can permanently exempt these customers from CTRs, then what is the risk they would end up on an OFAC list?

& document document document your decision & the board's awareness of the decision.

You caught them! Some banks do it because it appeases the examiners who think they should really check every over the counter item, a truly ridiculous exercise. Clearly, when the theoretically possible penalties are not capped by the dollar amount involved, it's a bit cynical, but not necessarily ignorant.

I would do it as a compromise position in response to an examiner's pressures, somewhat confident the illogic would not dawn on them.