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CTR Exemption Regulation Amended to Include MMDAs
On July 28, 2000, FinCEN published an Interim Rule in the Federal Register (65 FR 46356-46361) amending the CTR exemption regulation at 31 CFR Section 103.22(d). Provisions of this Interim Rule became effective on July 31, 2000. The Interim Rule addresses several issues brought to FinCENís attention by depository institutions regarding the implementation of the reformed CTR exemption regulations. Highlights of the Interim Rule are:
- Transactions conducted through a customerís Money Market Demand Account ("MMDA") as well as through that same customerís transaction accounts may be exempt from CTR filing under certain circumstances.
- A Designation of Exempt Person form (TD F 90-22.53) does not need to be filed in order to exempt from CTR filing the transfer of currency to or from any of the 12 Federal Reserve Banks.
- The Designation of Exempt Person form (TD F 90-22.53) is now the only means to provide an eligible customer with an exemption.
An exemption for a non-listed business customer or a payroll customer applies to these customersí MMDAs that are used for business purposes in addition to their transaction accounts. For an MMDA of a non-listed business or a payroll customer to be exemptible, such a customer must have maintained an eligible transaction account in addition to the MMDA for at least 12 months and met all other requirements of the CTR exemption regulations. It should be noted that an exemption for payroll customers applies only to account withdrawals for payroll purposes.
With respect to those depository institutions that may have mistakenly applied an exemption to a customerís MMDA prior to this Interim Rule under the assumption that the term "transaction account" included an MMDA, FinCEN generally will not require backfiling of CTRs related to such a customer. Therefore, a request for backfiling determination need not be made if the provisions of the Interim Rule were otherwise met when the exemption was first applied.
The IRS Enterprise Computing Center-Detroit may be contacted at 1-800-800-2877 to assist you with questions regarding the use of the reformed CTR exemption regulations (31 CFR Section 103.22(d)(2)), completion of the Designation of Exempt Person form (TD F 90-22.53), completion of the CTR form (Form 4789), and CTR paper or magnetic filing issues. For other BSA related questions, you may call FinCENís Regulatory Helpline at 1-800-949-2732, leave a message with your name, name of your financial institution, and telephone number, and one of our staff will return your call promptly.
Interim Rule that amends the reformed CTR exemption regulation.