Federal law requires a bank, credit union, or other financial institution to create a log entry every time it sells a cashier’s check, bank draft, money order, or traveler’s check for physical cash in an amount of $3,000 to $10,000. The monetary instrument log requirements come from 31 CFR 1010.415, and they cover what information to collect, how long to keep it, and how to handle customers who do and do not already have an account at the institution.1eCFR. 31 CFR 1010.415 – Purchases of Bank Checks and Drafts, Cashier’s Checks, Money Orders and Traveler’s Checks The details matter, because this is one of the areas examiners look at closely and where penalties reach individual employees as well as the institution.
When a Log Entry Is Required
Four instrument types fall under the rule: cashier’s checks, bank drafts, money orders, and traveler’s checks. The trigger is a cash purchase in the $3,000 to $10,000 range, inclusive.1eCFR. 31 CFR 1010.415 – Purchases of Bank Checks and Drafts, Cashier’s Checks, Money Orders and Traveler’s Checks Sales above $10,000 in currency are handled through a Currency Transaction Report instead, so the log fills the band just below that reporting threshold.2FFIEC BSA/AML InfoBase. FFIEC BSA/AML Assessing Compliance with BSA Regulatory Requirements – Currency Transaction Reporting
“Currency” here means physical coin and paper money, U.S. or foreign, that circulates as legal tender.3FinCEN. Application of FinCEN’s Regulations to Persons Administering, Exchanging, or Using Virtual Currencies A purchase funded entirely from an existing deposit account balance, without physical cash crossing the counter, is not covered. Cryptocurrency, prepaid cards, and wire transfers do not count as currency for this rule.
There is a trap worth flagging. If a customer brings cash to the branch, deposits it, and then immediately uses those funds to buy a qualifying instrument in the $3,000 to $10,000 range, the sale still has to be logged. FinCEN guidance makes clear that running the money through a deposit account does not convert a cash purchase into a non-cash one for recordkeeping purposes.4FFIEC BSA/AML InfoBase. FFIEC BSA/AML Assessing Compliance with BSA Regulatory Requirements – Purchase and Sale of Certain Monetary Instruments Recordkeeping
Same-day purchases by the same buyer are aggregated. A customer who buys a $1,500 money order in the morning and a $2,000 cashier’s check in the afternoon triggers a single log entry for the $3,500 combined total, even though neither individual sale reached the threshold on its own.1eCFR. 31 CFR 1010.415 – Purchases of Bank Checks and Drafts, Cashier’s Checks, Money Orders and Traveler’s Checks Instrument types do not have to match; aggregation runs across all four categories.
What to Record for Accountholders
When the buyer has a deposit account at the institution, the log entry must capture:
- Purchaser’s name
- Date of purchase
- Type of instrument purchased
- Serial number of each instrument
- Dollar amount of each instrument
The institution also has to confirm the buyer is in fact an accountholder. If identity was already verified when the account was opened and that verification is on the signature card or in the account file, nothing more is required. If it was not, the institution has to examine an identification document acceptable for cashing checks for non-depositors and record the details from that document.1eCFR. 31 CFR 1010.415 – Purchases of Bank Checks and Drafts, Cashier’s Checks, Money Orders and Traveler’s Checks
What to Record for Non-Accountholders
A buyer without a deposit account at the institution gets a longer intake. In addition to everything required for an accountholder, the log must include:
- Purchaser’s address
- Social Security number, or alien identification number if the buyer is a non-citizen without an SSN
- Date of birth
The buyer’s name and address must be verified against an acceptable identification document, with specific details recorded from that document, such as the state of issuance and number of a driver’s license.1eCFR. 31 CFR 1010.415 – Purchases of Bank Checks and Drafts, Cashier’s Checks, Money Orders and Traveler’s Checks The institution has no prior relationship to rely on, so the identification step is where the record is built.
How Long the Records Must Be Kept
All records created under this requirement have to be retained for five years and made available to the Secretary of the Treasury on request at any time during that period.1eCFR. 31 CFR 1010.415 – Purchases of Bank Checks and Drafts, Cashier’s Checks, Money Orders and Traveler’s Checks The regulation does not prescribe a format. Paper, scanned image, database entry, or something else is fine, so long as the records exist and can be produced promptly for an examiner.
Penalties for Non-Compliance
Penalties attach at both the institutional and the individual level, which is why training frontline tellers matters as much as drafting the policy.
Civil Penalties
A negligent violation of BSA recordkeeping requirements can carry a civil penalty of up to $500 per incident. A pattern of negligence raises that to $50,000. Willful violations go up to the greater of $100,000 or the amount involved in the transaction, with a $25,000 floor.5Office of the Law Revision Counsel. 31 USC 5321 – Civil Penalties The statutory figures are adjusted annually for inflation. As of January 2025, the inflation-adjusted maximum for willful BSA violations ranges from $71,545 to $286,184.6Federal Register. Financial Crimes Enforcement Network Inflation Adjustment of Civil Monetary Penalties
Criminal Penalties
Willful violations can also be prosecuted criminally. The baseline is a fine of up to $250,000, up to five years in prison, or both. If the violation accompanies another federal offense or is part of a pattern of illegal activity involving more than $100,000 in a 12-month period, the maximum fine doubles to $500,000 and the prison term stretches to ten years.7Office of the Law Revision Counsel. 31 USC 5322 – Criminal Penalties These apply to individual employees, not just the institution.
What a Compliant Program Looks Like
Correct log entries are the output, not the whole obligation. Federal regulators expect every financial institution to maintain a written BSA/AML compliance program, approved by the board of directors and reflected in board minutes, that covers monetary instrument recordkeeping along with the institution’s other obligations.8FFIEC BSA/AML InfoBase. FFIEC BSA/AML Assessing the BSA/AML Compliance Program That program should include training for the staff who actually sell these instruments so they know when a log entry is triggered, what to collect from accountholders versus non-accountholders, and how to handle the deposit-then-purchase scenario that otherwise looks exempt.
Suspicious patterns in the log itself can also create a separate reporting duty. If a transaction involves or aggregates at least $5,000 and the institution suspects it is designed to evade BSA reporting, a Suspicious Activity Report must be filed.9Financial Crimes Enforcement Network. Suspicious Activity Reporting (Structuring) Repeat purchases just under $3,000, the same buyer appearing day after day, or purchases made on behalf of someone else are the kinds of entries that should get a second look.