Multiple "wire" transactions and compliance issues?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Post Reply
Topic Author
JohnFiscal
Posts: 1113
Joined: Mon Jan 06, 2014 3:28 pm
Location: US citizen now retired in Canada. Subject to income tax in both.

Multiple "wire" transactions and compliance issues?

Post by JohnFiscal »

I am in a situation where I need to transfer about $214,000 USD to Canada for a real estate purchase. I have made transfers before with smaller amounts (less than $30K) using OFX (a foreign currency exchange broker) with good results. But now I see obstacles with this larger amount.

My bank, Capital One 360, limits wire transfers to $50,000 to accounts that I have not "linked"' previously, which would apply to OFX. These two entities are linked the other way, I log into OFX and set up an EFT with Capital One 360 checking. So I would need to perform (4) $50K wire transfers and a smaller EFT.

My concern is that a flurry of large wire transfers will raise flags with various compliance departments, at Capital One and even at OFX. I plan to call each entity on Monday when hopefully I can get someone of some authority to discuss the issues with me.

So my question to BH is does anyone have any thoughts of the likelihood of encountering serious problems with these transfers?

An alternative is to wire the full $214K from Capital One 360 to my "RBC (Georgia)" checking account (this is the US arm of the Royal Bank of Canada), these accounts are already linked and there should be no issue transferring the full amount. I would then transfer the funds "cross-border" in the simple on-line operation of moving the funds from my RBC US checking account to my RBC Canadian chequing account. However, I can about guarantee that this will cost me around $5K-$6K US more than using OFX due to this bank's high costs and unfavorable exchange rates. (I don't have time to educate myself in using Norbert's Gambit.)
Last edited by JohnFiscal on Sun Oct 24, 2021 5:07 pm, edited 1 time in total.
random_walker_77
Posts: 2207
Joined: Tue May 21, 2013 8:49 pm

Re: Multiple "wire" transactions and compliance issues?

Post by random_walker_77 »

In the US, the key threshold for reporting is 10K USD. Since your transfers are all larger than that, there's little chance that you'd be accused of "structuring" your transactions to skirt reporting, which is a big no-no. Wouldn't hurt to call and ask though.

PS, you probably wouldn't ever use Norbert's Gambit these days. For these sums, an ibkr account + 2 wire transfers ought to save you a decent chunk relative to ofx. You get spot rates and just pay their forex commission of $2 per $100K... (just beware the trap that ibkr has poor withdrawal policies for funds that are "pulled" in, so you'll want to push it into ibkr, which I suppose doesn't matter if you're wiring). When's your deadline?
User avatar
typical.investor
Posts: 5245
Joined: Mon Jun 11, 2018 3:17 am

Re: Multiple "wire" transactions and compliance issues?

Post by typical.investor »

JohnFiscal wrote: Sat Oct 23, 2021 8:34 pm
My concern is that a flurry of large wire transfers will raise flags with various compliance departments, at Capital One and even at OFX. I plan to call each entity on Monday when hopefully I can get someone of some authority to discuss the issues with me.
Banks report transaction over $10,000, so if your transactions are larger than that, what difference does it make? If you do several transactions for $9,000, it might look like you are trying to evade reporting. But that would not be the case.

Personally, I would be more worried about the receiving institution getting confused with 4 identical $50k transactions coming in and them not being processed, but what can you do? Contact them in advance perhaps. The sending bank should have a record anyway...
hotscot
Posts: 430
Joined: Wed Feb 01, 2012 10:05 am

Re: Multiple "wire" transactions and compliance issues?

Post by hotscot »

'My concern is that a flurry of large wire transfers will raise flags with various compliance departments, at Capital One and even at OFX.'

Nope.
Businesses do this all the time.

For example yesterday I sent a wire for 4K.
Then later another for 647K.

I do this all the time many times a year.

You might get questioned more during the transaction but don't sweat it...they're trying to protect you.

There are millions of wires a day.
Topic Author
JohnFiscal
Posts: 1113
Joined: Mon Jan 06, 2014 3:28 pm
Location: US citizen now retired in Canada. Subject to income tax in both.

Re: Multiple "wire" transactions and compliance issues?

Post by JohnFiscal »

Thanks for all the tips. #thumbsup
User avatar
8foot7
Posts: 4426
Joined: Mon Jan 05, 2015 6:29 pm

Re: Multiple "wire" transactions and compliance issues?

Post by 8foot7 »

I would do whatever you can reasonably do to minimize the number of sub-10k transactions. Even the intent to structure is considered structuring.

Personally I would ACH your deposits to RBC in Georgia from Capital One and then make one international wire for the full amount. ACH doesn’t have the same reporting requirements that wires do, you’ll pay less in fees, and it seems a lot cleaner.
Kingghoti
Posts: 66
Joined: Sun Jul 19, 2020 9:57 am

Re: Multiple "wire" transactions and compliance issues?

Post by Kingghoti »

typical.investor wrote: Sat Oct 23, 2021 10:29 pm
JohnFiscal wrote: Sat Oct 23, 2021 8:34 pm
My concern is that a flurry of large wire transfers will raise flags with various compliance departments, at Capital One and even at OFX. I plan to call each entity on Monday when hopefully I can get someone of some authority to discuss the issues with me.
Banks report transaction over $10,000, so if your transactions are larger than that, what difference does it make? If you do several transactions for $9,000, it might look like you are trying to evade reporting. But that would not be the case.

Personally, I would be more worried about the receiving institution ***getting confused with 4 identical $50k ***
transactions coming in and them not being processed, but what can you do? Contact them in advance perhaps. The sending bank should have a record anyway...
A Simple and not original Idea:
Transaction 1 $49,990
Transaction 2 $49,980
Transaction 3 $49,970
Transaction 4 $50,000
Add $60 to your remainder smaller wire :)

I use a similar approach to my periodic (many in same month) ACHs between my accounts. I also encode the transaction date in the tens and units and cents.

Best
inverter
Posts: 1021
Joined: Mon Jul 27, 2015 1:40 pm
Location: New York, NY

Re: Multiple "wire" transactions and compliance issues?

Post by inverter »

Most of the regulations being discussed in here are for cash deposits at a bank. I think you're overthinking this and should just wire it from one account to the other in the total sum you'd like to. I'm sure Capital One has a form or some means where you can achieve this. My parents just paid off a $700k mortgage. You're saying that you couldn't do that at Capital One at all? Seems unlikely.
Topic Author
JohnFiscal
Posts: 1113
Joined: Mon Jan 06, 2014 3:28 pm
Location: US citizen now retired in Canada. Subject to income tax in both.

Re: Multiple "wire" transactions and compliance issues?

Post by JohnFiscal »

random_walker_77 wrote: Sat Oct 23, 2021 10:26 pm PS, you probably wouldn't ever use Norbert's Gambit these days. For these sums, an ibkr account + 2 wire transfers ought to save you a decent chunk relative to ofx. You get spot rates and just pay their forex commission of $2 per $100K... (just beware the trap that ibkr has poor withdrawal policies for funds that are "pulled" in, so you'll want to push it into ibkr, which I suppose doesn't matter if you're wiring). When's your deadline?
Thank you for the tip on ibkr. I watched a video on forex from their Help center; it certainly looks simple.

A question maybe you can answer, please? So their systems permit me to draw (or push) USD from my US checking account, then I can redirect the CAD$ into my Canadian checking account? It will accept a different country's bank as a receiving bank? (I don't think it makes any sense otherwise, but I want to confirm). Thank you.
Topic Author
JohnFiscal
Posts: 1113
Joined: Mon Jan 06, 2014 3:28 pm
Location: US citizen now retired in Canada. Subject to income tax in both.

Re: Multiple "wire" transactions and compliance issues?

Post by JohnFiscal »

Kingghoti wrote: Sun Oct 24, 2021 8:58 am
A Simple and not original Idea:
Transaction 1 $49,990
Transaction 2 $49,980
Transaction 3 $49,970
Transaction 4 $50,000
Add $60 to your remainder smaller wire :)

I use a similar approach to my periodic (many in same month) ACHs between my accounts. I also encode the transaction date in the tens and units and cents.

Best
Ah, it took me a moment, but I see what you're doing there with the transaction amounts. Nice idea.

(btw, I do 'get' your username. ;-)
Topic Author
JohnFiscal
Posts: 1113
Joined: Mon Jan 06, 2014 3:28 pm
Location: US citizen now retired in Canada. Subject to income tax in both.

Re: Multiple "wire" transactions and compliance issues?

Post by JohnFiscal »

inverter wrote: Sun Oct 24, 2021 10:54 am Most of the regulations being discussed in here are for cash deposits at a bank. I think you're overthinking this and should just wire it from one account to the other in the total sum you'd like to. I'm sure Capital One has a form or some means where you can achieve this. My parents just paid off a $700k mortgage. You're saying that you couldn't do that at Capital One at all? Seems unlikely.
It seems unlikely but it is so. This is not a brick and mortar bank so I can't walk into the lobby. I suppose I am lucky that I can even wire relatively large amounts on-line. This bank permits only domestic wires, up to $500K to a "title company", up to $50K to other recipients (or larger amounts if the "recipient" is already linked to this bank via EFT).
inverter
Posts: 1021
Joined: Mon Jul 27, 2015 1:40 pm
Location: New York, NY

Re: Multiple "wire" transactions and compliance issues?

Post by inverter »

JohnFiscal wrote: Sun Oct 24, 2021 4:08 pm
inverter wrote: Sun Oct 24, 2021 10:54 am Most of the regulations being discussed in here are for cash deposits at a bank. I think you're overthinking this and should just wire it from one account to the other in the total sum you'd like to. I'm sure Capital One has a form or some means where you can achieve this. My parents just paid off a $700k mortgage. You're saying that you couldn't do that at Capital One at all? Seems unlikely.
It seems unlikely but it is so. This is not a brick and mortar bank so I can't walk into the lobby. I suppose I am lucky that I can even wire relatively large amounts on-line. This bank permits only domestic wires, up to $500K to a "title company", up to $50K to other recipients (or larger amounts if the "recipient" is already linked to this bank via EFT).
Hmm... this would have me rethinking banking with them!
random_walker_77
Posts: 2207
Joined: Tue May 21, 2013 8:49 pm

Re: Multiple "wire" transactions and compliance issues?

Post by random_walker_77 »

JohnFiscal wrote: Sun Oct 24, 2021 4:00 pm
random_walker_77 wrote: Sat Oct 23, 2021 10:26 pm PS, you probably wouldn't ever use Norbert's Gambit these days. For these sums, an ibkr account + 2 wire transfers ought to save you a decent chunk relative to ofx. You get spot rates and just pay their forex commission of $2 per $100K... (just beware the trap that ibkr has poor withdrawal policies for funds that are "pulled" in, so you'll want to push it into ibkr, which I suppose doesn't matter if you're wiring). When's your deadline?
Thank you for the tip on ibkr. I watched a video on forex from their Help center; it certainly looks simple.

A question maybe you can answer, please? So their systems permit me to draw (or push) USD from my US checking account, then I can redirect the CAD$ into my Canadian checking account? It will accept a different country's bank as a receiving bank? (I don't think it makes any sense otherwise, but I want to confirm). Thank you.
I haven't actually done it myself, but have read about it and basically "yes." As I understand it, IBKR will allow you to send your converted funds into your Canadian checking account. Just read the fine print about hold times -- you want to have your US bank ACH (or wire) the money into IBKR, otherwise the money has a ridiculously long hold time (44 days vs 4 days). If time-critical, you'd probably just wire it rather than ACH. From the sounds of it, IBKR could save you some money, but I wouldn't use it if it's cutting things too close. For such large sums, you want to make sure you can meet your deadlines and you'll want to make sure that transactions aren't delayed for a new account or first transfer or for security authentication reasons etc.

see other threads such as this one: viewtopic.php?t=317734

also note that there may be withdrawal limits based on security considerations:
https://www.interactivebrokers.com/en/i ... 44&p=cash1
Topic Author
JohnFiscal
Posts: 1113
Joined: Mon Jan 06, 2014 3:28 pm
Location: US citizen now retired in Canada. Subject to income tax in both.

Re: Multiple "wire" transactions and compliance issues?

Post by JohnFiscal »

random_walker_77 wrote: Sun Oct 24, 2021 10:22 pm about ibkr
Thank you much for the information. Very helpful!
Kingghoti
Posts: 66
Joined: Sun Jul 19, 2020 9:57 am

Re: Multiple "wire" transactions and compliance issues?

Post by Kingghoti »

JohnFiscal wrote: Sun Oct 24, 2021 4:02 pm
Kingghoti wrote: Sun Oct 24, 2021 8:58 am
A Simple and not original Idea:
Transaction 1 $49,990
Transaction 2 $49,980
Transaction 3 $49,970
Transaction 4 $50,000
Add $60 to your remainder smaller wire :)

I use a similar approach to my periodic (many in same month) ACHs between my accounts. I also encode the transaction date in the tens and units and cents.

Best
Ah, it took me a moment, but I see what you're doing there with the transaction amounts. Nice idea.

(btw, I do 'get' your username. ;-)
JohnFiscal:
Thanks. For any still curious:
I think it was George Bernard Shaw who observed that the English word "fish" could be spelled using "gh" as in "tough", "o" as in "women" and "ti" as in "nation," - - - or such is my hazy non-internet-assisted recollection.

Well done, sir. A hat tip to you.

:)
Topic Author
JohnFiscal
Posts: 1113
Joined: Mon Jan 06, 2014 3:28 pm
Location: US citizen now retired in Canada. Subject to income tax in both.

Re: Multiple "wire" transactions and compliance issues?

Post by JohnFiscal »

A follow-up on this "event".

I got all the wires made successfully. I remember that it was a very stressful 5 or 6 business days. Every day sending out a large wire from Capital One to the forex company. Cap One made no provision to store the recipient's information so I had to type it in from scratch each day (providing another chance at entering the wrong information, potentially leading to lost funds).

I was concerned about Cap One's compliance department would cause me headaches, but this didn't happen. They didn't say a peep. However the forex company caused me a lot of grief with multiple inquiries from their compliance department. I felt their questions were intrusive. I had to provide copies of statements or transactions from Vanguard showing how the funds showed up (as wires) in Capital One 360, and then the wire transfers from Cap One to their forex. For some reason the forex couldn't follow this simple paper trail; saying there was insufficient money in the Cap One account to explain the wires to the forex. This required multiple phone calls and emails over several days. I suppose eventually they gave up.

I will soon have another large sum to transfer from the US to Canada. My house is for sale in Florida and the offers are over the asking price. I wish I had set up an ikbr account like discussed in this thread but I haven't gotten around to it yet (I did try to set up an account here in Canada but they wouldn't let me use my US bank account; then I hadn't gotten around to trying to set up a US account). If I don't do something soon I'll be sending wires from Cap One to the forex for 3 weeks. bummer
Post Reply