From the MAY 28, 1990, issue Credit Union Times.
WASHINGTON D.C. – Effective Aug. 13, new money laundering regulations will require credit unions to keep a monthly chronological log identifying members who purchase travelers checks, cashier's checks, banks checks or money orders worth $3,000 or more. The recordkeeping requirement was issued by the Treasury Department on May 15. The recordkeeping requirements have been eased somewhat from the proposed rule by dropping a two-tier system that distinguished between individuals with transaction accounts and those with other types of accounts.
The final rule permits less extensive recording requirements from accountholders than for non-accountholders. Since CUs sell these instruments primarily to account holding members, they will be able to take advantage of the less stringent recordkeeping requirements, industry sources say.
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One of the most controversial aspects of the rule, which has been under consideration for almost 18 months, has been how the financial institution will gather the information to identify the purchaser. The final rules permit identification either by verifying that the individual is an accountholder or verifying the identity of the accountholder. That means that a financial institution can ask the purchaser for identification, such as a driver's license, rather than requiring that the teller leave the window to check a signature card.
Fore members purchasing $3,000 to $10,000 in cashiers' checks, money orders or travelers checks, CUs will be required to log the following information: name of purchaser; date of purchase; number of each instrument purchased; and the means of identification used if the person has not been identified earlier.
Treasury said that in order to minimize delays in selling these instruments and to prevent holding up lines the required information may be noted on a copy of the instrument or other record and later transferred to a log.
"For example, many banks sell cashier's checks and require the purchaser to fill out an application prior to issuing the check. The required information could be noted on the application. After a customer leaves, the information could then be transferred to the log," Treasury explained.
The log will have to be kept in a centralized location, therefore information from branch offices will have to be sent to the main location within 15 days of the end of the month. The regulation stipulates only that the information must be kept in a readable format, therefore it can be kept in paper, disk or magnetic tape form, Treasury said. The records must be retained for five years.
Treasury warns that financial institution should have compliance procedures in place to assure that the logs are maintained fully and accurately.
Treasury was required to issue the rule under the Anti-Drug Abuse Act of 1988.
The law and regulation prohibit sale of traveler's checks, cashiers checks money orders or bank checks in amounts greater than $3,000 unless the identity of the purchaser is verified and recorded.
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