Under 31 CFR 1010.415, a bank or other financial institution that sells cashier’s checks, bank drafts, money orders, or traveler’s checks in exchange for cash between $3,000 and $10,000 must record the sale in what is commonly called a Monetary Instrument Log. The monetary instrument log requirements cover which transactions get logged, what information the entry must contain (with a stricter set for buyers who don’t have an account at the institution), and how long the records must be kept. The rule sits just below the $10,000 Currency Transaction Report threshold, and getting it wrong carries civil and criminal exposure for both the institution and the employees involved.
Which Sales Trigger a Log Entry
The rule applies to sales of four instrument types when the buyer pays in currency:
- Cashier’s checks
- Bank drafts
- Money orders
- Traveler’s checks
Currency means physical coin and paper money of the United States or another country that circulates as legal tender.1FinCEN. Application of FinCEN’s Regulations to Persons Administering, Exchanging, or Using Virtual Currencies Cryptocurrency, prepaid cards, and wire transfers are not currency for this purpose. A purchase funded entirely by debiting an existing deposit account, with no cash changing hands, falls outside the rule.
One sequence often trips up frontline staff. If a customer deposits cash into an account and then immediately uses those funds to buy a qualifying instrument in the $3,000–$10,000 range, the sale still triggers the recordkeeping requirement. FinCEN guidance is explicit that a deposit-then-purchase does not exempt the transaction.2FFIEC BSA/AML InfoBase. FFIEC BSA/AML Assessing Compliance with BSA Regulatory Requirements – Purchase and Sale of Certain Monetary Instruments Recordkeeping
The Dollar Range and Same-Day Aggregation
A log entry is required when a cash purchase of qualifying instruments totals $3,000 to $10,000, inclusive.3eCFR. 31 CFR 1010.415 – Purchases of Bank Checks and Drafts, Cashier’s Checks, Money Orders and Traveler’s Checks Anything above $10,000 in currency is handled through a Currency Transaction Report filed with FinCEN, a separate obligation.4FFIEC BSA/AML InfoBase. FFIEC BSA/AML Assessing Compliance with BSA Regulatory Requirements – Currency Transaction Reporting
Same-day purchases by the same buyer must be aggregated, whether or not the instruments are the same type. If the combined total for the day reaches $3,000, a log entry is required for the aggregate amount.3eCFR. 31 CFR 1010.415 – Purchases of Bank Checks and Drafts, Cashier’s Checks, Money Orders and Traveler’s Checks A $1,500 money order in the morning and a $2,000 cashier’s check that afternoon means an entry for $3,500.
What Information the Log Must Contain
The required fields depend on whether the buyer has a deposit account at the institution. Non-accountholders get the longer list.
Accountholders
For a buyer with a deposit account at the institution, the log must include the purchaser’s name, the date of purchase, the type of instrument, the serial number of each instrument, and the dollar amount of each instrument. The institution must also verify that the buyer is in fact an accountholder. Identity verification already on file (for example, on a signature card) satisfies the verification requirement; if none exists, the institution has to examine an identification document acceptable for cashing checks for non-depositors and record the identifying details.3eCFR. 31 CFR 1010.415 – Purchases of Bank Checks and Drafts, Cashier’s Checks, Money Orders and Traveler’s Checks
Non-Accountholders
For a buyer with no deposit account, the log must include everything required for an accountholder plus:
- Purchaser’s address
- Social Security number, or alien identification number if the buyer is a non-citizen without an SSN
- Date of birth
The institution must verify the buyer’s name and address by examining acceptable identification and recording the specifics from that document, such as the state of issuance and number of a driver’s license.3eCFR. 31 CFR 1010.415 – Purchases of Bank Checks and Drafts, Cashier’s Checks, Money Orders and Traveler’s Checks
How Long Records Must Be Kept
All records created under this requirement must be retained for five years and made available to the Secretary of the Treasury upon request during that period.3eCFR. 31 CFR 1010.415 – Purchases of Bank Checks and Drafts, Cashier’s Checks, Money Orders and Traveler’s Checks The regulation doesn’t prescribe a storage format, only that the records exist and can be produced.
Penalties for Non-Compliance
Failing to keep these records exposes the institution and, in serious cases, the individual employees involved.
Civil
A negligent violation of BSA recordkeeping requirements can bring a civil penalty of up to $500 per incident. A pattern of negligence raises the cap to $50,000. Willful violations carry the greater of $100,000 or the transaction amount involved, with a $25,000 floor.5Office of the Law Revision Counsel. 31 USC 5321 – Civil Penalties These figures are adjusted annually for inflation. As of January 2025, the inflation-adjusted maximum for willful BSA violations runs from $71,545 to $286,184.6Federal Register. Financial Crimes Enforcement Network Inflation Adjustment of Civil Monetary Penalties
Criminal
Willful violations of BSA recordkeeping regulations can bring a criminal fine of up to $250,000, up to five years in prison, or both. Where 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 fine doubles to $500,000 and the prison term extends to ten years.7Office of the Law Revision Counsel. 31 USC 5322 – Criminal Penalties These penalties reach individual employees as well as the institution.
How the Log Fits Into CTRs, SARs, and Structuring
The Monetary Instrument Log is one layer in a broader Bank Secrecy Act framework.8Internal Revenue Service. Bank Secrecy Act Cash transactions above $10,000 go on a CTR. The log covers the band just below that, and its purpose is to catch structuring, meaning deliberately breaking a large cash transaction into smaller pieces to avoid the CTR. Structuring is a federal crime carrying up to five years in prison, or up to ten years when the activity involves more than $100,000 in a 12-month period or accompanies another federal offense.9Office of the Law Revision Counsel. 31 U.S. Code 5324 – Structuring Transactions to Evade Reporting Requirement
Log entries are also a common source of Suspicious Activity Reports. When a transaction involves or aggregates at least $5,000 and the institution suspects it is designed to evade BSA reporting, a SAR is required.10Financial Crimes Enforcement Network. Suspicious Activity Reporting (Structuring) Repeated purchases just under $10,000, or the same buyer picking up $4,500 in money orders week after week, are the kinds of patterns a compliance review of the log is meant to surface.