An Overview of Suspicious Activity Report Training Elements in 2005

By John Byrne, representing the American Bankers Association, and Robert Rowe, representing the Independent Community Bankers of America (ICBA), to the Bank Secrecy Act Advisory Group

It is certainly appropriate to discuss key elements of a Suspicious Activity Report (SAR) training program in The SAR Activity Review. Clearly, The Review includes useful resources that financial institutions can use to provide employees with information needed to enhance and improve their Suspicious Activity Report (SAR) procedures. These resources are needed because, as we have all witnessed, the spate of recent enforcement orders often contain language such as:

Within 60 days of this Agreement, the Bank shall submit to the [agency] an acceptable written plan to provide effective training to all appropriate personnel at the [location] in all aspects of regulatory and internal policies and procedures related to the Bank Secrecy Act (BSA) and the identification and reporting of suspicious transactions, and to update the training on a regular basis to reasonably ensure that all personnel are trained in the most current legal requirements and in the organization?s risk management processes.

In addition, the Office of the Comptroller of the Currency (OCC) has indicated in their ?enforcement guidance for BSA/AML program deficiencies? that a cease and desist order (C&D) will be issued if, among other things, the bank lacks a BSA (Bank Secrecy Act) compliance program that covers elements such as training. (See OCC 2004-50, issued November 10, 2004).

How can banks be sure they have the proper resources to handle Suspicious Activity Report training? This question is beyond the scope of this section but we can point you in the right direction.

Training Parameters

In order to prepare your employees to handle situations that demand Suspicious Activity Report consideration and the possible filing of a Suspicious Activity Report, an institution must first outline for its employees the Suspicious Activity Report related categories of suspicious activities on the Suspicious Activity Report filing form. Banks are not expected to be experts in the nuances of each listed crime on the form but a general description of what is clearly reportable is necessary. From mortgage loan fraud to false statements, the list of crimes is defined in the last edition of the SAR Activity Review. However, appropriate employees should be familiar with the types of suspicious activities covered by the Suspicious Activity Report form and the elements of those activities so that they know what to look for.

Training staff on the categories of Suspicious Activity Report (SAR)-related crimes also will help address the confusion that exists beyond the compliance function that Suspicious Activity Reports must be filed simply if there is ?suspicious activity.? As we know, Suspicious Activity Reports should be filed after careful analysis of the facts of a given transaction or series of transactions and not by impulse. Explaining the various Suspicious Activity Report categories and what potentially makes an activity suspicious may assist in alleviating this confusion.

Once the institution creates the basic elements of a Suspicious Activity Report training program, the decision must be reached on who must be trained and what level of training is needed. Since all employees must be aware of the Suspicious Activity Report program, training must be across-the-board. Training for those not involved in the day-to-day aspects of security or compliance can be broad and should at least contain a general description of the suspicious activities listed on the Suspicious Activity Report form. For employees with greater responsibility for the bank?s Anti-Money Laundering (AML) compliance program, especially those who make the final decision that a Suspicious Activity Report should be filed, training should be more comprehensive. A variety of sources are available to assist banks with this training, whether it is done in-house or through a trusted third party provider. For example, a bank might choose to rely on audio-conferences, one-day seminars, video training or other materials to properly train employees. However, it is important that the bank develop a training program for its employees.

An institution can supplement this type of training by information through in-house newsletters, encouraging staff to sign up for government agency online updates and other outside sources. Whatever the source, it is critical that this broad training be updated frequently with mention of major news stories or enforcement actions. Since suspicious activities are constantly evolving, it is important that appropriate bank employees have access to information about current developments in suspicious activities.

For those involved in Anti-Money Laundering (AML) and Bank Secrecy Act (BSA) oversight in the institution, it is recommended that the staff attend compliance schools, achieve professional certification, and participate in national and regional Anti-Money Laundering (AML) programs on an annual basis. As mentioned above, the increased availability of on-line or remote Bank Secrecy Act/Suspicious Activity Report (BSA/SAR) training makes it easier to stay current with Suspicious Activity Report issues and other reporting mandates.

Suspicious Activity Report Related Resources

Some of us on the Bank Secrecy Act Advisory Group (BSAAG) remember a time when available resources were in hard bound binders that were updated annually. Now, compliance officers can get access to training materials or supplements with the click of a mouse and without cost. Take advantage of the myriad of government resources as you prepare your Suspicious Activity Report (SAR) training materials. We recommend:48

FinCEN?s website
The SAR Activity Review, including all back issues;
Information from your Anti-Money Laundering (AML) software vendor;
Anti-Money Laundering (AML) seminars
Compliance publications;
Federal banking agency websites;
Federal law enforcement sites such as the Department of Homeland Security (DHS), Federal Bureau of Investigation (FBI) and others;
Your friendly neighborhood national or state trade association

As you struggle with compliance in this new environment, it is comforting to know that critical information is available to assist you in this challenge. 48 Neither the Bank Secrecy Act Advisory Group (BSAAG) nor any government agency may recommend any commercial software vendor or any non-governmental seminar sponsor.

Excerpted from SAR Activity Review Issue 8, page 43