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Don’t Believe the Myths

What Consumers Should Know About the Bank Secrecy Act

Consumers sometimes receive misinformation through email or other advertisements that lead them to believe that making any large-dollar transaction through their bank puts them at risk of having funds seized by the Internal Revenue Services (IRS). Peoples Bank wants to create more awareness of these scare tactics, while ensuring consumers have peace of mind when storing their money in a bank.

Such ads may tell consumers that their money can be seized without cause. They may even provide examples of “victims” of such fund seizures. What these ads do not tell you is that, if funds were seized by the IRS, it was likely because these “victims” knowingly structured their transactions to avoid reporting them to the government as required by the 2014 Bank Secrecy Act (BSA).  In effect, this false statement makes people think twice about keeping their money in a bank. In reality, the 2014 Bank Secrecy Act (BSA) was designed to assist banks in detecting and preventing attempts to evade currency transaction report (CTR) filing requirements. CTRs track large transactions to prevent money laundering and other financial crimes.

“The information in some advertisements is nothing more than a gross misrepresentation of the truth,” said Al Vermeer, Peoples Bank CEO. “The law they cite is actually focused on money laundering, and the misleading information they use is intended to scare people from keeping their money in a bank. Banks are still the safest place to keep your money.”

What you need to know about the BSA

  • Federal law requires financial institutions to report currency transactions of more than $10,000 by or on behalf of one person as well as multiple transactions that add up to more than $10,000 in a single business day.
  • Financial institutions must obtain personal identification information about the individual making the transaction, such as a Social Security Number or driver’s license.
  • Filing of a CTR is required regardless of the reason for the currency transaction.
  • Being the subject of a CTR does not mean you will be investigated or that your funds will be seized.
  • Breaking up currency transactions into smaller amounts in an attempt to avoid reporting those transactions to the government is called “structuring.” This is a federal crime that can result in imprisonment for up to five years and a fine of up to $250,000.
  • Penalties are doubled if structuring involves more than $100,000 during a 12-month period.

“The most important thing to remember is the BSA was passed to safeguard the financial industry from threats posed by money laundering and other financial crimes,” Vermeer said. “As long as CTRs are filed in accordance with the BSA and the money was obtained lawfully, the IRS will not seize funds.”

*These tips provided by the Iowa Bankers Association.

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