Anna was working as a teller at a local credit union. She was known and loved by everyone in her community. Her bubbly personality could make even the grimmest individuals smile. Whenever someone would walk in to deposit $10,000 she would look at them and say, “Now honey, I know you don’t want to be held up here for an hour as I fill out the paperwork for all that money. Just take some back, and come back again tomorrow.” This made life easier for everyone, and the lines would continue to move fast.
Anna wanted to run away from all the extra work required by the Bank Secrecy Act.
The Bank Secrecy Act
The 1970 Anti-Money Laundering Law, better known as the The Bank Secrecy Act is an act that requires banks, credit unions and financial institutions to report large sums of money deposited into an account. However, this is no longer a secret act, as most criminals are aware of it. They have developed creative means, like Anna, to avoid having their transactions reported to the Financial authorities. For this reason, the act also includes reporting suspicious deposits, even if they are less than the magic $10,000.
This is a law that governs all financial institutions to ensure that adequate reporting of financial transactions is done. Anna lived in a community where she believed that she knew everyone well. She didn’t see an immediate threat by the individuals who were depositing money. She believed that she would be able to identify suspicious business from miles away.
She was wrong. As it was found that one of the biggest drug dealers in her community was accessing the financial services, yet went unnoticed for years. After which, resulted in many lawsuits placed on the Credit Union.
Compliance laws have been put into place to assist legitimate businesses run smoothly. They are there to protect your money, privacy and business. Although they may be a bit more work to abide by, they help to keep you safe from individuals who are not involved in legitimate business activities. After all, how well can you really know someone?
As a business, you should ensure that you don’t skip any of the steps required in compliance. These steps can prevent you from bigger pains down the road.
*Disclaimer: Stories are based on real life situations, however names and details have been changed.