It can be somewhat difficult to keep up with the requirements for filing Suspicious Activity Reports (SARs), despite the rules not changing all that often. Suspicious activity reporting is addressed in the Bank Secrecy Act regulations published by FinCEN, the FDIC, the FRB, and the OCC. The SAR regulations published by these four agencies are substantially similar, with the ones published by the regulators (FDIC, FRB and OCC) being slightly broader in scope and requiring SARs to be filed for instances of insider abuse as well as requiring the institution’s board of directors to be notified when a SAR has been filed. Regardless of who an institutionās federal regulator is, every institution is subject to both their regulatorās SAR regulations, as well as FinCENās SAR regulations.
The timing requirements of all the SAR regulations are the same: a bank is required to file a SAR no later than 30 calendar days after the date of initial detection by the bank of facts that may constitute a basis for filing a SAR. If no suspect is identified a bank may delay filing a SAR for an additional 30 calendar days to identify a suspect. In no case shall reporting be delayed more than 60 calendar days after the date of initial detection of a reportable transaction.
For the specifics of filling out SARs and for supplemental information like what to do when additional information is obtained and a SAR needs to be amended, or when the bank files a SAR with incorrect information, and a corrected SAR needs to be filed, we look to the SAR Filing Guide published by FinCEN. Additionally, this guide includes information about filing continuing SARs when the suspicious activity continues beyond the initial SAR filing.
According to the guidance, continuing SARs should be filed on successive 90-day review periods until the suspicious activity ceases, but may be filed more frequently if circumstances warrant it. Banks have up to 30 days following the end of a review period to file the continuing report for a total of 120 days of review and filing deadline. Although continuing SARs are filed for any suspicious activity that continues beyond the initial SAR filings, we most often receive questions about continuing SARs in relation to marijuana-related businesses (MRBs), as continuing SARs will be likely required on MRB customers for the duration of their relationship with the bank.
A question that arises often is related to the optional more-frequent-than-90-day-filing of continuing SARs and whether filing before the end of the 90-day review period āresetsā the clock for continuing SARs. Although the guidance is not explicit about the requirements for this, conservatively any filing of a continuing SAR should reset the clock for subsequent SAR filings. So, for example, if a SAR is filed and the same suspicious activity continues after that filing, a continuing SAR would be required to be filed no later than 120 days after the initial filing. However, if a bank doesnāt wait 120 days, and files after 60 days, when is the next continuing SAR required (assuming the activity continues): in 60 days, or in 120 days? Conservatively the clock would be reset, and the next SAR would be required 120 days after the most recent continuing SAR.
We know that in addition to SAR filings not being easy, not every scenario is specifically addressed in the regulation or guidance. Feel free to reach out to us on the hotline to discuss or walk through questions you have on SAR filings or anything else that arises.