Compliance Q&A: OFAC-blocked Account

Can the credit union deduct service charges from an OFAC-blocked account?

January 29, 2013

Q Can the credit union deduct service charges from an OFAC-blocked account?

A Generally, yes.

In most cases, Office of Foreign Assets Control (OFAC) regulations contain provisions to allow a financial institution to debit blocked accounts for normal service charges. Each set of program regulations describes the provisions.

The charges must be in accordance with a published rate schedule for the type of account maintaining the fund. But credit unions should check with OFAC before imposing charges because sanction program rules vary.

Currency Transaction Reports

Q Does a credit union need to file a Currency Transaction Report (CTR) when staff know a member places more than $10,000 in a safe deposit box?

A In this instance, no—because there was no “transaction.” Credit unions must file CTRs for currency transactions greater than $10,000 conducted by, through, or to the institution. But a “transaction” means a “deposit, withdrawal, exchange, or other payment or transfer” – so those rules don’t apply here.If the member’s actions appear suspicious, on the other hand, the credit union should consider filing a Suspicious Activity Report (SAR).

SAR filings

Does a match on the Financial Crime Enforcement Network’s (FinCEN) 314(a) list trigger a SAR filing?

No. Section 314(a) of the USA Patriot Act allows a law enforcement agency to solicit information from financial institutions via a FinCEN information request. The names that appear in the request are already persons under investigation by federal law enforcement authorities. So a match on the list wouldn’t trigger a SAR filing. Unless noted otherwise in the request, the credit union isn’t required to take any further action after reporting any positive matches to FinCEN.

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