With so many signs and warnings of economic trouble ahead, including bank holidays with banks holding onto our money, plus new FDIC regulations allowing banks to do that, it would be wise to have cash on hand before anything happens.
Contrary to what we have been led to believe, our bank deposits are not protected. We are told they are protected by the Federal Deposit Insurance Corporation (FDIC), but the FDIC is mandated by law to keep a balance equivalent to only 1.15% of insured deposits, which is only about $25 billion. In the event of a crisis, they would be unable to insure deposits for the remaining 98.85% of Americans. So there is a very high probability we would lose our deposits.
The reality of bank deposits being at risk will soon become the new normal, which is going to redefine banking in the future. Before that happens, we should withdraw as much as possible.
Besides getting right with the Lord, having an emergency supply of cash should be at the top of our checklist to prepare for a financial crisis. However, before withdrawing cash from our bank account we should find out how to do it without getting arrested or having our money seized by federal agents. That sounds absurd, until reading our federal regulations.
The easiest and safest way to get cash is by ATM withdrawals. However, the daily limit for withdrawals is usually about $400 or $500, depending on the bank and the customer account. The advantage of using this method is it keeps us under the radar of big brother’s all-seeing eye. The disadvantage is it takes longer to withdraw a large amount, so we would have to plan ahead and be disciplined to keep withdrawing for days or weeks.
Withdrawing cash from our checking or savings account with assistance from a bank teller allows us to withdraw larger amounts, but can also get us arrested if we withdraw too much money or appear suspicious. By law the threshold for getting reported is $10,000, but regulations have effectively lowered the amount to just $5,000. Even amounts less than $5,000 can get reported if they appear suspicious or get too close to $5,000.
Banks are required by law to complete a Currency Transaction Report for any cash transactions exceeding $10,000, which notifies the Financial Crimes Enforcement Network (FinCEN), which was established in 1990 as a division of the United States Treasury. The report includes the customer’s name, social security number, bank account numbers, home address, and details about the transaction(s). Once the report is received by FinCEN, they are authorized by the Bank Secrecy Act (BSA) to investigate, arrest, and seize the funds of the bank customer if they believe there might be any suspicious activity.
The BSA was passed in 1970 to help law enforcement agencies stop illegal activities, such as money laundering and tax evasion. But a lot of things have changed since 1970. According to dollartimes.com, $10,000 in 1970 would be the equivalent of $62,284 in 2015. So at the time the BSA was passed, the only cash transactions that had to be reported were the ones exceeding $62,284 in today’s dollars. It makes sense that a cash transaction of that size would be suspicious. Imagine walking into our bank today and requesting $62,284 in cash. My guess is the request would be denied and we would have federal agents waiting for us when we got home, if we even made it home.
Amazingly, the dollar threshold set in 1970 has never been adjusted for depreciation. One can only wonder why not. Instead of raising it, regulators have lowered it to $5,000 through the handbook for the Federal Financial Institution Examination Council, which is the guide used by banks to determine what qualifies as suspicious.
Although the BSA law has always required banks to submit Suspicious Activity Reports (SAR) for customers making cash transactions of any amount if they appear suspicious, the handbook lowers the threshold to $5,000 and effectively makes all individuals suspicious. A few of the statements from the handbook are shown in quotes below along with my translations of what it really means. Any cash transactions over $5,000 are now considered suspicious if:
- It is “not the type of transaction that the particular customer would normally be expected to engage in”. Since cash transactions of $5,000 or more would only be normal for a business and would almost never be normal for an individual, this regulation treats all individuals as suspicious and requires them to be reported. Requesting access to our own money for our own personal use is no longer acceptable.
- The bank sees “no business purpose” for the transaction. If there was any doubt about the statement above, it is removed by this statement. Any non-business purpose is considered suspicious activity. In other words, this regulation requires banks to file a SAR for any individuals making cash transactions for their own personal use.
- The bank knows of “no reasonable explanation for the transaction after examining the available facts”. If the above two points were not enough already, this one covers everything and anything else. Individuals are guilty until proven innocent because any explanation for wanting our money for our own personal use is not a “reasonable explanation”.
- The bank believes the transaction “is designed to evade BSA regulations.” This is another catch-all requirement because the bank is now judging the hidden motives behind our transactions.
$5,000 today would be the equivalent of $803 in 1970. Imagine how absurd it would have been in 1970 to require a SAR for any individual withdrawing over $803 in cash. That shows how far we have drifted from the original intent of the law and how much our government has removed our civil liberties.
The banks are required by federal law to enforce these regulations. As reported by Simon Black, founder of Sovereignman.com
What a lot of people don’t realize is that banks are already unpaid government spies.
Federal regulations in the Land of the Free REQUIRE banks to file ‘suspicious activity reports’ or SARs on their customers. And it’s not optional.
Banks have minimum quotas of SARs they need to fill out and submit to the federal government.
If they don’t file enough SARs, they can be fined. They can lose their banking charter. And yes, bank executives and directors can even be imprisoned for noncompliance.
While the Obama administration has refused to enforce many of our laws, including the Defense of Marriage Act and our immigration laws, the Justice Department is going out of their way to increase the requirements of the BSA. As reported by The Wall Street Journal on March 16 2015
The U.S. Justice Department’s criminal head said banks may need to go beyond filing suspicious activity reports when they encounter a risky customer.
“The vast majority of financial institutions file suspicious activity reports when they suspect that an account is connected to nefarious activity,” said assistant attorney general Leslie Caldwell in a speech last Monday, according to prepared remarks.
“But, in appropriate cases, we encourage those institutions to consider whether to take more action: specifically, to alert law enforcement authorities about the problem.”
The remarks indicate that banks may be expected to do more than just file SARs, a responsibility that itself can be expensive and time-consuming.
Some banks already have close relationships with law enforcement, said Kevin Rosenberg, chair of Goldberg Lowenstein & Weatherwax LLP’s government investigation and white collar litigation group. Ms. Caldwell’s remarks “speak to moving forward in a more collaborative way,” said Mr. Rosenberg.
A tip-off from a bank about a suspicious customer could lead law enforcement to seize funds or start an investigation, Ms. Caldwell said.
Trying to get around the law can also get us in trouble. For example, if we make multiple smaller transactions from different branches on the same day we would still get reported if the total exceeds $5,000. FinCEN has a name for multiple withdrawals or deposits at different branches on the same day. They call it “structuring.” By law, all transactions carried out at the same institution on the same day count as a single transaction even if the transactions occur at different branches. The law is based on the aggregate daily amount.
Another example of trying to get around the law is making a withdrawal of $4,999. That would likely be considered suspicious and would get reported. To play it safe, we should avoid withdrawing anything close to $5,000 per day. However, even smaller transactions could get reported if the bank finds other reasons to believe we are suspicious.
Does anyone really believe a criminal would bother to do money laundering for just $5,000? There must be another explanation for lowering the threshold. I believe these are the first signs of capital controls coming to America.
This stuff is outrageous. It is nothing less than tyranny. However, I suspect most Americans are unaware of these requirements and will remain unaware until a crisis makes credit and debit cards unacceptable methods of payment. Then everyone would want their cash, but won’t be able to get it.
In conclusion, my recommendation is to rely on ATM withdrawals as the preferred method of withdrawing cash. Beyond that, smaller withdrawals of less than $2,000 per day would hopefully avoid any problems. We should also avoid making cash withdrawals on several consecutive days involving the assistance of a bank teller because that appears unusual and could trigger a report even with amounts far below $5,000.
If you don’t yet know about what is coming, please see my previous posts,
- Warning: Sudden Economic Collapse Coming in 2015
- The Final Four Seasons of the U.S. Dollar
- Why the Greek Drama Will Soon Become a Tragedy
Author: James Bailey
James Bailey is a blogger, business owner, husband and father of two grown children. In 1982, he surrendered his life to the Lord Jesus Christ. In 2012, he founded Z3news.com to broadcast the message of salvation by reporting end time news before it happens.
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