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#279519 - 11/24/04 04:51 PM
suspicious activity reports
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Anonymous
Unregistered
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What is common practice at community banks regardiing the reporting of SAR's to the Board of Directors? i.e. Do you send each director a copy in the board package, or does someone give an executive summary? We have a board member who is an attorney who approves the SAR's before the filings are done. Thanks, Steve
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#279522 - 11/24/04 05:33 PM
Re: suspicious activity reports
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10K Club
Joined: Nov 2000
Posts: 18,765
Central City, NE
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Quote:
We do not want to put Board members in the position of possibly knowing a local person on whom we file and risking them saying something inadvertently.
I don't understand this. Doesn't your BOD look at past due loans, new loans, charged off accounts, etc.? If you're concerned about your board members "saying something" you have more headaches than SAR's. If your board members have loose lips, you need new board members.
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#279523 - 11/24/04 06:14 PM
Re: suspicious activity reports
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Power Poster
Joined: Oct 2001
Posts: 5,564
Clintonville, WI, USA
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Agreed, David. The Board needs to be informed. I don't believe numbers of SARs filed is very meaningful.
_________________________
Member of the National Sarcasm Society - like we need your support!
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#279524 - 11/24/04 07:27 PM
Re: suspicious activity reports
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Gold Star
Joined: Jun 2004
Posts: 290
California
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We give the Board the full information at the Board meeting, but only a synopsis is sent out beforehand in the written Board package.
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#279525 - 11/24/04 08:42 PM
Re: suspicious activity reports
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Gold Star
Joined: Aug 2003
Posts: 372
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We were told by outside examiners that it was against regulation to give a full disclosure to the board on SAR's filed. We just tell them the number that has been filed. It is my understanding that they cannot receive any more info than that.
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#279528 - 11/25/04 01:28 AM
Re: suspicious activity reports
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Power Poster
Joined: Jun 2001
Posts: 8,272
Where the heart is
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One other issue to consider if you are reporting names and such to the Board:
If the information goes into the "Board Package" (Agenda, minutes, etc.), then you have to be VERY CAREFUL who has access to that information. Consider that your outside auditors, accountants, and other persons doing "due diligence" work for or on your Bank will be given access to the Board Package. By having those names in there, you may inadvertently disclose the SAR filing to outside persons.
SOX 404 squares off against BSA....
Also, if your Board Package is subpoened, you are going to have an ever bigger headache and hasssle to "redact" the SAR names and such.
_________________________
CRCM,CAMS Regulations are a poor substitute for ethics. Just sayin'
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#279529 - 11/26/04 03:12 PM
Re: suspicious activity reports
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Gold Star
Joined: Oct 2004
Posts: 327
Upstate N.Y.
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We recently changed our procedure. We were disclosing names, but effective immediately, we are just issuing each SAR a number, and when the SARs are reported to the Board, no name will be given, just a number. That way, the suspicious activity can be detailed, but no customer or business name will be disclosed. We feel it is safer that way.
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#279532 - 11/26/04 10:45 PM
Re: suspicious activity reports
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Anonymous
Unregistered
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I've heard in several seminars that you should only provide to the board the number of SARs that were filed in the previous month and nothing else, the reason being that you may have filed a SAR on a board member. He may be able to identify himself from the details even if no names are given.
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#279534 - 11/27/04 02:32 PM
Re: suspicious activity reports
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10K Club
Joined: Jul 2001
Posts: 84,339
Galveston, TX
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This subject has been beat to death a number of times, i.e., Reporting SARS to the Board Do a search and read away!
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#279535 - 11/28/04 06:01 PM
Re: suspicious activity reports
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10K Club
Joined: Nov 2000
Posts: 18,765
Central City, NE
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Quote:
We don't need new board members. We give extensive detail on the individual SARs but we have made a choice, as we are well within our rights to do (and many other banks do as well) that we do not name names unless there is some major issue and then of course the board would be informed. We do not want anyone having information on SARs that could result in a violation of the BSA.
It is a management decision that every bank can make and I truly resent sarcastic remarks. I have been doing this for very many years as an actual banker and know what I am doing.
We tell what occurred, whether it is a repeat, are we considering asking them to leave the bank, extensive detail. We discuss employees who have been fired. But we do not take a chance on exposing the bank on BSA unless it is absolutely necessary.
I assume you were referring to me, so I need to respond. Nothing sarcastic was meant by my statements. If your BOD members can't keep them mouths shut, they need to be removed from the Board - Period! No joke, no sarcasm, serious business. The BOD has access to many confidential things, SAR's being just one.
You indicated you made a choice about how much info you want to provide them, but they are the Board and I think we have this backward. They tell YOU what they want, not the other way around. It is not a management decision either. I, too, have been doing this for many years and I think it is best (just my opinion) to provide them with full information.
Quote:
Many people who post here at BOL and occasionally ask questions are actually very experienced bankers. Just because we are not consultants does not mean we are stupid.
I don't believe that I have ever inferred or stated this. What drove this comment? BOL is an exchange of info from bankers of all types. Why wouldn't you want my opinion or others? To state such a negative comment only hurts BOL - it doesn't foster free exchange. No wonder so many want to be anonymous - so they don't get blasted incorrectly.
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#279536 - 11/28/04 07:43 PM
Re: suspicious activity reports
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10K Club
Joined: Dec 2000
Posts: 21,293
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David, your response came across sarcastically whether you intended it or not. Even not sarcastically, it is not stated in very polite terms that would be conducive to a meaningful dialogue. I am not the only one who took it that way. After my response, I received several PM's from registered members saying that they too get tired of the style of response of a few members - and we are not talking Paragon here.
You can read through my years of responses here and you will see that I do not last out at people.
Our board was part of the decision that, except in extreme cases, we do not put customers names in the board reports re SARs. It is a decision our bank made. Our board is highly involved in all decisions at the bank.
Banks get to review the requirements, weigh their options and make decisions. Some may choose to include names, other may choose to include detail but no names. Our regulators are fine with our method of reporting.
The Board and Audit Committee are fine, I (as a senior manager) am fine with it, the rest of senior management is fine with it and the OCC is fine with it. This method works for us.
It might not work for another bank. But I would not last out at them and tell them they are totally wrong. The question was how do other banks report. I stated how my bank reports. Others stated how they report.
It is possible to disagree by saying something like "That is interesting. Has anyone such as your regulator ever commented on whether not including names is a problem?"
That would have led to a meaningful discussion.
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#279537 - 11/29/04 03:04 PM
Re: suspicious activity reports
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10K Club
Joined: Aug 2001
Posts: 21,939
Next to Harvey
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There is no regulatory guidance on this point, but I'm in the "give them every fact they need" camp. That means the board gets only summaries or statistical breakdowns of most SAR filings, not the raw information. Acknowledged exceptions would unquestionably involve SARs involving employees and those representing significant losses to the bank. (In both cases, the board can do something with that information. For example, they can question the bank's hiring practices or internal controls.)
Beyond that, it simply isn't business information - there is nothing a board member can do with it and disclosing it to them involves only risks, no rewards. The "real" safe harbor lies in the fact that the fewer the number of people who know about the SAR, the stronger the protections afforded to the bank. If I were a board member and these were discussed at board meetings I would view it as an attempt at "upward delegation."
This debate only exists among smaller institutions - a bank that files 100+ SARs a month is not going to report them to the board on an individual basis.
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.
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#279538 - 11/30/04 12:29 AM
Re: suspicious activity reports
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Diamond Poster
Joined: Nov 2000
Posts: 1,820
Southern California
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I know some of us are concerned about releasing names. But at some banks the BOD is interested in knowing who SARS are filed on. If you disclosed names, make sure the report is clearly labeled CONFIDENTIAL and a reminder that disclosing the names in the report is prohibited. Most board members take their positions very seriously and would never do anything that would cause a problem to the bank. For a definitive answer, ask YOUR REGULATOR what they would recommend.
_________________________
Dolly Nugent CRCM Opinions expressed are my own.
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#279540 - 11/30/04 11:55 AM
Re: suspicious activity reports
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Anonymous
Unregistered
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If a board member wants to review a SAR, so be it. However, I would have them do it "off the record". In other words, keep the details out of the Board Minutes, but make the actual reports available for review with the understanding that SARs are confidential and information in them is not to be disclosed to anybody period.
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#279541 - 11/30/04 10:41 PM
Re: suspicious activity reports
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Platinum Poster
Joined: May 2004
Posts: 833
Michigan
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Quote:
If a board member wants to review a SAR, so be it. However, I would have them do it "off the record".
I would be very uncomfortable having one or more board members review SAR's "off the record."
I report the number of SAR's and reasons for filing to the audit committee of the board. The audit committee is free to ask questions (and often does). The audit committee makes the decision on a case by case basis about how much detail to give the full board. In my five year tenure they have never asked to see a copy of a SAR nor have they chosen to give names or specifics to the full board - but that's their decision, not mine.
_________________________
If you approach life with pure logic you can avoid almost all of the fun.
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#279543 - 12/01/04 02:03 PM
Re: suspicious activity reports
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Anonymous
Unregistered
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This probably belongs in the General Discussion or another forum, however I wanted to follow-up on the valid points that were brought to the table by kaybee.
I have concluded that BOL has become a forum for many egos. I once made an anonymous post and one “Power Poster” (not anyone that has posted to this thread) stated, and I am paraphrasing, that he was “…not providing free research, not serving as your compliance research department and all that anonymous posters do is beg for information.”
Last time I checked, a definition for forum is a public medium for open discussion.
That same attitude often comes across in the “Ask a Banker” forum. Typically the original posters in that forum are laymen looking for guidance, not condescending responses that makes all members of BOL appear arrogant.
Lighten-up guys ---- it just a job.
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