finance law, part one

So for a new job, I’m having to learn about finance law – specifically, BSA, ECOA reg B, FCRA, FDCPA, GLB Privacy, TILA reg Z, and UDAP reg AA.

Woah there spaceman that’s a whole lot of alphabet soup

Yeah I know.  So what I’m going to do to help myself learn this a bit better and study for an upcoming test, is I am going to attempt to explain in blog posts just what all that stuff ACTUALLY MEANS in terms that ACTUAL HUMANS use.

PART ONE: BSA – BANK SECRECY ACT

I. WHAT?

The Bank Secrecy Act was enacted in 1970 (and further amended and modified in 1986 by the Money Laundering Control Act, in 1992 by the Annunzio-Wylie Money Laundering Act, and in 2001 by the US PATRIOT Act section 326) basically to combat money laundering.  In a general sense, it requires banks and other financial institutions to verify the identiy of their customers, keep records of those identities, keep records of certain transactions, and report details of certain other transactions to the IRS and other regulatory agencies.

II. HUH?

Specifically, this means that when you go to the bank to open an account (or certain other types of financial transactions at other financial institutions), you have to bring solid ID.  Driver’s license, current or expired passport, state ID card, these all work JUST FINE.  If you’re a business, then you should bring the articles of incorporation, business licenses, etc etc.  Specific documentation requirements can vary slightly but will be pretty close to one another.

Also, if you’re depositing, changing, withdrawing, or otherwise doing SOMETHING with more than $10,000.00 of cash (or cash-similar negotiable instruments, like certified checks or foreign currency), the bank (or financial institution) has to collect certain details and report the details of the transaction to the IRS.  The details they have to collect are similar to the details collected when you open an account – name, address, SSN, accounts affected by the transaction, that sort of thing.  Note that deposits and withdrawals are counted seperately – you can’t avoid a CTR (Cash Transaction Report, the report we’re talking about here) by depositing $5,000.00 and withdrawing $11,000.00.  Depositing twelve grand in cash or certified funds to your bank account? CTR.  Walking in with a crate of $50 bills and changing them into a trunkload of singles? CTR (assuming we’re talking over $10,000.00 here).  Paying off your mortgage with a $15,000.00 bank draft?  CTR.

Note that this applies to all transactions in a day – two $6,000.00 deposits in the same business day will trigger a CTR just the same as a single $12,000.00 deposit.  Transactions that happen after close of business (hitting the ATM after hours, using the night deposit, etc.) are treated as happening on the next business day – so if you cram $6,000.00 into the ATM after hours, then deposit another $6,000.00 in the bank the next day, a CTR would be triggered.  It also applies to transactions across different accounts at the same institution or at different branches of the same institution – so a $6,000.00 deposit to your checking account in the bank branch near your house and a $6,000.00 deposit to your money market account in the bank branch near your office would still trigger a CTR.

This is not the only recordkeeping requirement – activity that seems ‘out of place’ from your regular account activity would trigger what’s called a SAR or Suspicious Activity Report.  There are a number of scenarios that can trigger this, but here’s a common one:  If you maintain a pretty regular balance with paychecks coming in and bills and whatnot going out, and suddenly you’re depositing $8,000.00 every other day without some sort of explanation being volunteered, the bank is going to notice and they are going to make a note of it.  The SAR is sent to the proper regulatory agency, and they’ll take a look at it, and if they smell a rat, they’ll find out what the scoop is.  The first step of this is usually your bank contacting you – ‘Hey we noticed that you’ve been depositing 24 grand a week just like clockwork lately, what’s up with that? Did you get a raise?’ – and only if you can’t come up with anything that sounds good will the feds get involved.  Mysteriously having huge amounts of money dropped into your lap isn’t illegal by any means – heck, maybe you’ve just reunited with a long-lost and pathologically generous uncle – but it can be a pretty strong indicator of shady behavior, so the feds are going to want to know what’s up.  There aren’t really hard and fast rules of what triggers an SAR and what does not – sure there are guidelines, but an SAR can be triggered by something as simple as a teller thinking something’s a bit weird.  Note that not only does your bank not have to tell you that it has filed an SAR, but it is specifically forbidden from doing so.

Purchases of certified funds over $3,000.00 are also recorded.  If you buy a cashier’s check for $4,500.00, the bank is going to need your name, address, SSN, and date of birth; and is also going to have to make a note of the details of the transaction (date, number of instruments purchased, their type and serial numbers, etc etc) in a logbook.

III. WHY?

Like I said before, making large transactions isn’t illegal, but it can potentially be indiciative of illegal behavior.  Nobody is going to throw you in prison for paying off your mortgage all at once, but some dudes in suits might be a little curious as to where you got the bankroll for it, that’s all.

IV: WHAT ELSE?

Oh, there’s special rules for foreign shell accounts too – those are basically accounts maintained in US financial institutions by foreign banks that don’t have branches in the US to help facilitate US operations.  Foreign banks are required to, you know, EXIST before shell accounts are allowed.  This prevents funds being hidden or laundered by claiming they’re the assets of a foreign ‘bank’ that exists only on paper and is really a fancy construct for someone’s hidden bank account.  They also have to show that they have an agent that is a US resident that is authorized to access the account and recieve legal service (subpoenas and whatnot) on behalf of the foreign bank, and keep contact information on file for that agent.  This way, they can’t get around reporting and other legal requirements by putting the government in the position of having nobody to ask questions of or hand legal process papers to.

V.  WHAT DOES THIS MEAN TO ME?

If you’re opening an account at a bank, bring ID.  If you’re depositing or withdrawing some serious cash, don’t get steamed when it takes a little longer and you have to sign some extra stuff.  If your banking habits change significantly and suddenly, don’t be surprised if your bank gives you a holla to find out why.  (And no, nobody will think less of you if you quietly fantasize to yourself that somewhere, there’s a guy in a suit CONVINCED that you’re a James Bond villain maintaining a secret identity in suburban Poughkeepsie.)  And finally, if you’re a foreign bank, you need to jump through a couple extra hoops to open an account in the US – but if you’re a foreign bank, why are you reading my blog?

dead friends

Been about a year since the passing of both my grandmother and my best friend Matthew.  I’ve been thinking about Matt a lot lately, because Scout summer camp is coming soon, and one of my fondest and clearest memories from when I was a kid (I have mild brain damage, so my memory is wobbly at best) is sitting on the steps of the canteen at Katahdin Scout Reservation, splitting a pint of Ben & Jerry’s Chocolate Chip Cookie Dough (Matthew’s favorite flavor, and mine until it was unseated by Phish Food) and watching the world go by.

Matthew was my best friend in every way possible – we had no shame or secrets from each other, we frequently completed each other’s thoughts, and we both stayed sane through the vagaries of adolescence in rural Maine by venting our frustrations and puzzlements at each other.  He was the brother I never had.

He turned me on to David Lynch films, I turned him on to a few genres of music.  We would stay up until the thin hours of the morning sending endless Links to their doom in search of the elusive Princess Zelda.  We shared everything.

I miss him.  My personal faith, which I don’t talk a whole lot about and doesn’t really fit 100% with most established religions, is comforting – sort of a cafeteria Hinduism – because I know (as much as it is possible to know such a thing) that he is a part of you and me and everything and that we are all part of him.  It still doesn’t make me miss him less, though, or wish less that I could call him up.

I made the common and terrible mistake of letting contact slip between us – we hadn’t talked in a while when I heard he had passed.  I don’t believe in regret, but I definitely wish that I hadn’t let contact go by the wayside.  It wouldn’t have changed anything, but.

Treasure your life.  Treasure the lives and love of those around you.  Recognize and hold sacred the relationships – spoken or otherwise – you have with others.  To do otherwise is the only real blasphemy, the only truly mortal sin.

do they know it’s christmas time at all

prisoners don’t just go away.

The other day on NPR, there was a bit about mandatory minimum sentencing for nonviolent drug offenses, which got me thinking. There are a lot – a LOT – of people in prison for the dumbest reasons imaginable. I happened to have a few extra Christmas cards, and a couple stamps kicking around, so why not?

Googling around for prison pen pal sites came up with http://www.friendsbeyondthewall.com , and a few clicks later I had the face, bio, and mailing address of some woman incarcerated in Texas staring back at me. I wrote out something pretty generic about happy holidays and whatnot, stuck on a stamp, addressed it, and boom.

I figure that no matter what people are in prison for, basically everyone deserves to be happy. If you’re so inclined, you can get the name, address, and other relevant details from the site without any of your information getting passed to them – you have to give a name and email address to the page to have them email you the mailing address, but you can use a fake name and a throwaway email if that makes you feel safer, and just omit the return address from your envelope (I didn’t use one).

how i make the small bucks

working from home

It occurred to me earlier that some folks might be interested in how I make side cash. Mostly, I do secret shopping – it doesn’t pay a huge amount by any stretch of the imagination, but hey, it’s a few bucks here and there and gets you a free somethingorother that you probably were going to buy anyway. Case in point: Last week I got paid $6 to walk into a convenience store and buy beer that I was going to buy anyway, and the company picked up the tab on the beer. All I had to do was keep my receipt and write down a few details like names and whether the cooler looked clean. Others will ask you take a couple pictures of stuff but really this is as easy as it gets.

Corporate Research International – This is the outfit I use most of the time, they have a lot of assignments and pay via paypal within about a week. If you decide to sign up, please let me know (before signing up yourself) so I can send you an invite from my account – this changes absolutely nothing for you, but nets me two bucks (more if you’re from another country) which I will be happy to split.

Secret Shopper.Com – I just started with these folks. There’s not as much of a selection as CRI (the above one) but they have some assignments that CRI doesn’t, so. They take about a month to mail you a check.

Mystery Shop.Org – This is sort of an aggregator for several different secret shopper companies and also has some focus groups and one-time marketing things.

Oh, speaking of focus groups. MarketWise is the outfit I do those through, but it’s Charlotte-specific so. Focus groups are an irregular source of cash because I generally only do them about every 6 months, but they pay well (around $75) when I do them. A little Googling will tell you if there’s a focus group thing in your area – there probably is if you live near any sort of a city.

Online surveys are also a source of some income, but the only outfit I’ve found that pays actual money with a minimum of screwing around is Pinecone Research , and they’re currently invite-only. Let me know in a comment if you’d like me to save you an invite, and next time I get one I’ll kick one your way.