A concentration account is a sole account used for the internal purposes of a

financial institution Financial institutions, sometimes called banking institutions, are business entities that provide services as intermediaries for different types of financial monetary transactions. Broadly speaking, there are three major types of financial inst ...

to facilitate the processing and

settlement Settlement may refer to: *Human settlement, a community where people live *Settlement (structural), the distortion or disruption of parts of a building * Closing (real estate), the final step in executing a real estate transaction *Settlement (fin ...

of multiple or individual customer transactions within the institution, usually on the same day.
, Federal Financial Institutions Examination Council (FFIEC) Bank Secrecy Act (BSA) / Anti-Money Laundering (AML) Examination Manual Such accounts can lead to the concealment by financial institutions of transactions made by customers. However section 325 of USA PATRIOT Act, Title III, Title III of the

USA PATRIOT Act The USA PATRIOT Act (commonly known as the Patriot Act) was a landmark Act of the United States Congress, signed into law by President George W. Bush. The formal name of the statute is the Uniting and Strengthening America by Providing Appro ...

banned their use for such purposes by prohibiting financial institutions from allowing clients to direct transactions that move their

funds Funding is the act of providing resources to finance a need, program, or project. While this is usually in the form of money, it can also take the form of effort or time from an organization or company. Generally, this word is used when a firm uses ...

into, out of, or through the concentration accounts of the financial institution; and prohibit the financial institutions from informing clients about the existence of such accounts and disallows any disclosure that may allow a customer a way of identifying such accounts that the financial institution may use. Section 325 also requires that financial institutions document and follow methods of identifying where the funds are for each customer in a concentration account that comingles funds belonging to one or more customers.

References

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