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FinCEN & Regulatory Agencies Respond to Industry Forum Comments

The Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, and the National Credit Union Administration (the ?agencies?) and FinCEN are not aware of any specific situations where an institution has been criticized solely because the number of Suspicious Activity Reports filed did not meet a minimum threshold or for not filing the same number of Suspicious Activity Reports as ?peer? institutions. It is not the policy or practice of the agencies or FinCEN to draw conclusions based solely on the number of Suspicious Activity Reports filed. Nonetheless, as evidenced by the Industry Forum article written by the American Bankers Association, there is a perception and concern within the financial services industry that examiners are criticizing institutions on this basis.

The agencies and FinCEN believe that there is no correct number of Suspicious Activity Reports that should be filed by an institution, and institutions should not be criticized solely on that basis. As part of the examination process, however, examiners must review significant changes in the volume or nature of Suspicious Activity Reports filed, and investigate the reason for this change. This may include a comparative analysis of the number of Suspicious Activity Reports filed by an institution and among peer institutions. A large discrepancy from the peer group average, or a large deviation from the number of Suspicious Activity Reports that an institution filed in the past, while not supportive of any inference or conclusion standing alone, would warrant further review by the examiners when evaluating the adequacy of an institution?s Bank Secrecy Act/Anti-Money Laundering program. Financial institutions undergoing such reviews should understand that an evaluation of the volume of Suspicious Activity Reports filed is merely a tool of the examination process, and does not represent conclusions about the adequacy of the institutions? Suspicious Activity Report program.

Excerpted from SAR Activity Review Issue 7, page 51

First published on 08/01/2004

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