When thinking about how financial institutions function, it is crucial to understand the concept and purpose of a currency transaction report, otherwise known as a CTR. A currency transaction report is a report made by United States financial institutions regarding all transactions that involve sums of money equal to or greater than $10,000. These reports are presented to FinCEN, and they can involve the exchange of currency, withdrawals, deposits, the transferring of money between accounts, and many other types of transactions. In regards to currency transaction reports, the definition of currency includes coin and paper money legally issued by a country, US notes, US silver certificates, US Federal Reserve notes, and foreign bank notes that are deemed, official.
As currency transaction reports have evolved over time, they have become progressively more efficient and technologically advanced. For instance, most financial institutions now have programs that automatically create CTRs when transactions of over $10,000 are successfully completed. The software generally fills in most of the information regarding the client, and employees now have the option of specifying on the form whether or not the transaction appears to be suspicious.
Since the option to mark transactions as suspicious was added, in 1996, it has helped to revolutionize how financial institutions and the government deal with financial crimes and money laundering. Before this occurred, financial institutions had to make an official phone call to legal enforcement in order to have a transaction looked at. Naturally, these institutions worried about the privacy of their customers, and they did not want to be held liable for releasing any information to the public sector. But, with the creation of the Money Laundering Control Act in 1986, privacy was no longer an issue. This meant that the government could eventually add the “suspicious transaction” box to the top of CTRs without having to worry about institutions potentially being liable.
Unless a customer chooses to complete an inquiry, he or she is not told when a CTR is filled out regarding one or more of their transactions. However, if a customer does find out that a CTR has been filed and then chooses to end the transaction, a bank employee consequently must fill out a suspicious activity report, otherwise known as a SAR.