I submitted a SAR for review ($6020 cash deposit + $1000 cash deposit, highly unusual for account to have any cash transactions) last week and our bank President decided he didn't feel it was necessary and would prefer further review. This is the first time he's stopped me from filing. What type of memo or extra informatin regarding the request not to file by the bank President should I attach to this SAR?

what is the possible illegal activity that you would be reporting?

Just the generic "Bank Secrecy Act/Structuring/Money Laundering. Cash transactions on this account have been pretty much non-existant since it was opened in a year ago so this is extremely unusal with no known explanation.

what have you done to seek out an explanation?

Just because it is different, does not mean it is illegal or wrong.

I think some more homework is warrented here before a determination can be made. Did they sell a car? Sell appliances? Close out an account elsewhere? Get paid back for a loan they made to someone else? Get a loan from someone else? Buried it in the back yard? A gift? etc...

I've asked his loan officer, asked the branch manager and questioned the teller and no one has any idea. Bank Pres mumbled something about loan restructure, which is fine, but he didn't give me any specifics and I'm still not sure what a loan restructure here has to do with him bringing us a large cash deposit. I cannot sit down and say "this transaction is okay because"...in a memo for my negative SAR file, that's my concern. It may very well be a perfectly normal transaction but I have nothing to back me up on that either. If someone here at the bank can give me some info I have no problem not filing this SAR but so far I've got nothing.

in my humble opinion ... a one time deposit of $6020 + $1000 is just not suspicious & would never even hit one of my structuring reports. There is no way the big banks file on every $7,000 deposit ... we'd all have SARs filed on us.

unless you have something else ... I just don't see this to be SAR worthy.

Did the customer say something to the teller, did they pull back any cash, where did the money go once it was deposited?


(just my opinion)

I am in agreement with newbsa.

I would also suggest a review of BSA training for your teams... they need to trained to ask questions with any type of large cash transaction, not just for BSA purposes, but also for saftey concerns of the customer. This way they will be well versed about their customers activity, and prepared to answer when you conduct your next investigation.

Your bank president is pushing back on this and he probably should because the bank staff has not done its homework in attempting to come up with an explanation. Everyone in the bank is guessing and no one has gone to the customer to ask.

Ask the customer? John, that' just crazy talk!!!

You need to record the reason for not filing. Possibilities include the fact that there was no evidence of suspicious activity beyond the amount of cash involved and the fact that any accusation of "structuring" to avoid CTR filing would be conditioned on the presence of more than $10,000 in currency. (So far, there's only about $7,000 on the table.)

If there is a loan restructuring that is taking place, your loan officer can and should ask the borrower where the cash came from. BSA considerations aside, it's a legitimate underwriting question.

As a complete aside, a SAR filing process where one person makes a decision and the CEO has veto powers is flawed. I suggest you use this incident as the springboard for setting up a SAR filing committee.

Well, let me back up and add some info. We are a 2 year old institution with 12 employees and one branch. We are also in one of the (self-proclaimed) toughest BSA exam districts in the country. The comment about "that would never hit one of my structuring reports" makes perfect sense in a larger institution like the one I used to work for, but our institution is so small and has so few transactions that it would stick out like a sore thumb to anyone who reviews transaction history here. I am BSA and Deposit Operations Officer, there is no one else that works with me on BSA. Now I'm going to elaborate a little further regarding BSA at our bank.

Our board knows the bare bones basics about BSA, doesn't want to know anything else, they're all business people with no bank experience. Last year's training was done on their time, most signed the form and never bothered to take it. This year is supposed to be a hands on training by me which I've created but whether or not it actually happens that way is debatable. I've had our Fed District's head BSA guy here, it made very little impression on the board, what few even came to listen to him.

Our Bank President is still stuck in 80's banking. He has somewhat acknowledged the neccesity of BSA but still thinks I'm just paranoid about everything and thinks little of the purposes behind filing SARs. Long story short and between me and this message board, he's not in any way, shape or form an authority figure here. The authority figure here is our EVP but he's our head commerical lender and like most lenders he's not too bothered about BSA either. Bank President requested the right to review all SARs before they are filed, I have no one else to go to here, the only committees here are the ones the board is required to have in place and even those are limited.

I have trained as was well as I can but until management pushes the involvement further my hands are tied. Please understand two things, one, I appreciate all of your advice and in most cases would love to follow it if I could and two I am actively searching other employement if that's an indication of how difficult things are. I worked in a horribly understaffed Ops department of an in-house bank for 9 years, went through a Core system change, and have been on both the acquiring and acquired side of a bank acquisition; it takes a lot to make me want to leave. As much as I hate being here some days, I don't want to let these guys screw up their chances of branching in 4th Quarter 2010 so I'm being very careful about dotting my i's and crossing my t's right now.

Wow! I envy you the fact that you're in a new, small bank, where you get to know everyone and usually get a very good, broad experience. I don't envy you the baggage that's sitting in the board room and corner office. Attitudes like that aren't considered acceptable by today's regulators.

It's my sense that regulators tend to cut de novos some slack in their first year or two, letting the bank focus on staying alive. But that leniency won't last, and the regulators will not want the bank to have bad habits deeply ingrained.

I do think that your board and CEO will be getting a wake-up call on BSA/AML once your first full-fledged exam is completed. If they don't come around then, they will find themselves on the receiving end of the regulatory equivalent of the 2 x 4 "up side the head."

Until then, you may have to decide whether you can abide having an executive veto on SAR filings. After the 2 x 4, I predict you'll have clearer sailing or the atmosphere will become too fouled to continue working there.

As Ken indicated, documenting the decision is key (as I am sure you know). If you have the president's veto in writing it should go in your file. If not, you should put a note in your file. I don't see what else you can do.

Being with this bank from the start has been a great experience, wouldn't want to trade it. I'm a deposit ops girl at heart, BSA was just not something I ever wanted to get into, but I think I'm doing well. I got us through our first state and fed exams last year/early this year with good marks but as mentioned, they're only soft on you for so long.

I'm going to do a simple documentation with the SAR regarding the veto and leave it at that for now, as devsfan said, there's not much else I can do at this point. I might not care for BSA but I still want to do things the proper way.

opsoff - I understand your situation, we've just been open 3 years a transaction like this would have stuck out like a sore thumb for me too since all our monitoring is done manually by me, the BSA Officer & Compliance Officer. And I completely understand the small environment and struggles that go along with it. Depending on the circumstances, I may or may not have filed on something like this. When I choose not to, I document that and continue to monitor the account for any further suspicious activity. I think you've done what you can do. If, after looking at everything, you really felt you should file and the CEO said don't, do what you said, document that and put it in your "no SAR filed" file. Your examiners will ask for this at your next exam and either agree or take issue with him vetoing it. Starting with a de novo is a great learning experience, but sometimes it is the most frustrating thing you've ever been through.

Big bank or small bank, the triggers for filing a SAR are the same.

I've worked at small & larger banks & never had anyone have the ability to "veto" my filing a SAR. And just as a side note, don't you as BSA Officer report directly to the Board? (although in your case, that doesn't sound like it would help much)

As noted, document .... document .... document & good luck with the new job search.

I am so glad that I am a customer of a large bank. The thought of my personal bank (not the bank I work for)filing a SAR on me for one cash deposit of $7,000 is too strange to me. I really do believe that they would monitor to determine if there is a pattern but not take a zero tolerance for cash deposits. I still don't understand the possible crime.

I'm lucky if I see the board memebers before they rush into the board room and shut the door. Unless we are called out on it I won't report to the board directly, it goes through the EVP. *Sigh* This is a young bank beginning to go through growing pains, the next round of exams will likely be a bit more of a wake up call. Oh, and SOX starts in January here, that's going to be a trip.

oh have fun with SOX ... that's another one I got responsibility of. Plus CRA will be added to my plate next year.

Nope, CFO is taking charge of SOX, I ended up with Red Flags and Privacy at the end of last year so this will make it even. Our Compliance Officer is taking care of CRA which is really good since I have no clue! It's been fun moving jobs around our tiny staff.

Nemsi, I agree with you. A critical element in the filing of a SAR involves the illegality of the transaction or component. I cannot ever recall filing a SAR under the circumstances described.

Thanks Fraudman! I'm beginnning to think that i missed the regulation making it a crime to deposit or withdraw cash from a bank account.

I have to agree with a couple of previous posters that this transaction is not something that would set off the "SAR bells" in my head. I worked at a very small institution for 2 years that had no significant cash activity at its one branch. This transaction would stand out in our cash activity reports, of course, but to me it still would not warrant a SAR filing. If I were suspicious I would conduct more of an investigation. I definitely would talk to the customer first - "Hi Mr. Smith, I noticed you made a large transaction recently. It seems out of the ordinary as compared to your usual activity, so I wanted to clarify what the transction was" Etc.

But the part that bothers me is the "veto" by the president. Excuse me? Years ago, in my very first BSA-related job, my boss and mentor (awesome lady, spent 30+ years in corporate governance and compliance) told me this:

"If you find something suspicious and feel you need to file a SAR, you file a SAR. Even if *I* tell you not to file that SAR, you file it. If the CEO tells you not to file that SAR, you file it."

I have always lived by that rule. But I also created SAR committees everywhere I've worked - however if I feel strongly that a SAR is needed, even if my committee disagreed, I would file it and keep all notes (committee and otherwise) on record.

Totally agree with mauraga and others. My biggest cash deposit was $7500 when I sold a car. Never had anything close to that. That was not an illegal transaction.

I would be concerned about the bank president as well. In both of my present and prior employers, the bank president found out I filed a SAR after I filed it. They both trusted my judgement, but I will say in hindsight I probably filed a SAR or two that didn't need to be filed.