Published guidance is going to scarce if not nonexistent. There are two good reasons to notify your regulator. You mentioned this could be messy with the potential to go public. Your regulator may be able to help out with damage control. With the fragile state of many banks these days, you may want your regulator standing by in case your customers panic. The second reason involves the suspect. If the abuse is ongoing, the regulator can issue a prohibition order to have the party removed from the bank. That is something a SAR cannot accomplish unless you can convince law enforcement to arrest the suspect on the spot without an investigation.
The closest thing you are going to get to "official" guidance is in the SAR regulations which state for OTS banks, "In situations involving violations requiring immediate attention, such as when a reportable violation is ongoing, the savings association or service corporation shall immediately notify, by telephone, an appropriate law enforcement authority and the OTS in addition to filing a timely SAR." The rules are the same for all regulators. Immediate attention could also include "possible adverse reaction in the community" or if the abuse may cause serious financial problems for the bank.
My advice is to call the regulator.
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