Q: Can a lender order an appraisal prior to receiving intent to proceed under Reg Z? Is it a regulatory violation if a lender orders one without having received intent to proceed? When can we first charge for an appraisal?

A: Reg Z does not expressly prohibit the actual ordering of an appraisal prior to receiving intent to proceed. However, without intent to proceed, the Bank runs the risk of not being able to charge the customer for the appraisal. Reg Z does not permit the Bank to impose most fees in connection with the transaction before the consumer has provided the intent to proceed. Once the bank has received intent to proceed, it may impose the appraisal fee. Some Banks choose not to order any appraisal prior to receiving intent to proceed because if the intent to proceed is never provided, the Bank cannot charge for it. So, this is not necessarily a regulatory error unless you attempt to charge for it without receiving intent to proceed. 

Q: We have a customer who withdrew $15,000 from their account at a branch, but then another $500 from that same account via an out-of-network (foreign) ATM on the same business day. How should we file the CTR – and should we include the ATM transaction?

A: CTRs involving ATMs can often present some tricky considerations, and even those “BSA aficionados” out there may recognize the fact that the specific scenario outlined in the question above isn’t exactly addressed (nor settled) within direct industry guidance - and, as such, the filing “answer” may ultimately be subject to interpretation in the end.

There are effectively two relevant considerations that seemingly conflict in such cases - the first being the definition of an ATM within the CTR Filing Instructions themselves, paired with the fact that such transactions are typically reportable by the owners of those ATMs - and the other being the statutory requirement (and general reasoning behind a CTR) to report multiple currency transactions as one transaction if the bank "…has knowledge that they are by or on behalf of any person and result in either cash in or cash out totaling more than $10,000 during any one business day…”. Relatedly, for aggregation purposes, debits must be added to debits, and credits must be added to credits.

Here, though the ATM in question is non-proprietary, the $15K withdrawal triggered the CTR reportable threshold, and would be paired with the $500 withdrawal from the same account at the other bank-owned ATM for aggregation purposes just mentioned - so filing a CTR and including the ATM withdrawal may likely be appropriate under the language of both 31 CFR 1010.313(b) and the following from the CTR Filing Instructions:

"Multiple transactions must be treated as a single transaction if the financial institution has knowledge that they are by or on behalf of the same person and they result in either currency received (cash in) or currency disbursed (cash out) by the financial institution totaling more than $10,000 during any one business day. For a bank, a business day is the day on which transactions are routinely posted to customers’ accounts, as normally communicated to depository customers."   

Essentially, if the bank is aware of both the branch $15,000 withdrawal and the $500 ATM withdrawal on the same business day (i.e., the withdrawal at the ATM would have posted on that same day, for instance), then it may be most appropriate that they both be included in the amount listed in Part I.

As with any BSA related query, the bank should also be sure to review its own BSA / AML, CIP, and CDD policies, procedures, and past practices as well, as ultimately, this may be more of a risk-based determination (and don’t forget to peruse our BSA / AML / OFAC Toolkit, for additional resources, as well).  

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