Exemptions to Currency Transaction Report Requirements

November 13, 2025

Hello Compliance Compatriots! I just returned from America's Credit Unions' BSA Certification School and am excited to share what I learned. This may be a refresher for some, but as part of the curriculum, I had to study up on the exemptions to Currency Transaction Reports (CTRs) and wanted to share some guidelines around exemptions.

First, a lightning round review - CTRs are those notices we send to FinCEN when a customer makes a transaction (any deposit, withdrawal, exchange, payment, or transfer) in cash that exceeds $10,000. $10,000 loan payment in cash? No CTR. $10,000.01 cash deposit? Time for a CTR. Likewise, if someone withdraws $11,000 in cash, a CTR is necessary, while an electronic payment transfer of the same amount does not require a CTR. CTRs must be filed within 15 calendar days following the day the reportable transaction occurred.

Those are the basic requirements. However, as we all know, for every rule there typically is an exception, and for regulations, an exemption. So, who qualifies for an exemption? 31 CFR 1020.315 explains that exemptions are based on the identity of the customer, generally businesses, not the identity of the financial institution. There are two levels of exemption, Phase 1 and Phase 2.

Phase 1

Phase 1 exempted customers include banks (credit unions are included under the definition of a bank), government agencies, entities exercising government authority, publicly traded companies (listed on the New York Stock Exchange or on NASDAQ), and subsidiaries of such companies when the publicly traded company owns the majority of the subsidiary - at least 51 percent. For every publicly traded company or qualifying subsidiary, the financial institution must file a Designation of Exempt Persons (DOEP) form on their behalf.

Phase 2

Phase 2 customers include Payroll Customers and Non-Listed Businesses. A Payroll Customer is a business that withdraws a large amount of money on a regular basis to pay its employees. A Non-Listed Business covers a wide range of organizations that are not publicly traded. All Phase 2 customers are required to have a DOEP on file with the financial institution. Here are the requirements to qualify as a Phase 2 customer:

  1. Must have maintained an account at the credit union for at least two months, so brand new accounts are not eligible.
  2. The business must be incorporated or otherwise organized under federal law.
  3. The account frequently* withdraws $10,000 or more.

* "Frequently" is defined as five or more reportable transactions in one calendar year.

 

Phase 2 Ineligibility

Some types of businesses are never eligible for a Phase 2 exemption, even with a DOEP. Those businesses include the following:

  • Non -bank financial institutions
  • Car dealers
  • Law/Accounting/Medical practices and other professional services
  • Pawn Brokers
  • Gaming Businesses
  • Trade Unions
  • Auctioning of Goods
  • Chartering of Ships, Aircraft, or Motor Vehicles
  • Investments
  • Real Estate
  • Title Insurance
  • FinCEN-specified (such as marijuana-related businesses)

 

Best Practices

Each financial institution should take steps to assure itself of the exemption and document the basis for its decision. It should review the eligibility of each exemption annually. A financial institution can use sources such as annual reports, stock quotes, and media to determine whether a business is still eligible for an exemption. An exemption is to be revoked if it was improperly given or if the circumstances that qualifies a business for an exemption change. Each DOEP has a "revoked" checkbox that should be checked in the event of a revocation. In the event a financial institution needs to back-file a DOEP showing a revocation, it can reach out to FinCEN to do so.

If you have any questions or suggestion for future blogs, please reach out to compliance@americascreditunions.org.