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#1942824 - 07/18/14 03:29 PM New FinCEN Publication: SAR Stats
Elwood P. Dowd Offline
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FinCEN has replaced its "By the Numbers Publication" (whose demise was already mourned here) with SAR Stats! I haven't had the chance to look at it yet, but I'm pretty excited! (Note the "links" as you read through it.)

blush I acknowledge that being excited about this is pathetic; there is no need to point it out to me.
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#1942884 - 07/18/14 04:13 PM Re: New FinCEN Publication: SAR Stats Elwood P. Dowd
Dani York, CRCM Offline
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You're not pathetic. You're in banking compliance. smile
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#1943080 - 07/18/14 06:40 PM Re: New FinCEN Publication: SAR Stats Elwood P. Dowd
Dani York, CRCM Offline
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Ok, I think FinCEN's report is off. I was looking at the comparison tables for depository institutions and the number of SARs filed for 2012 are really, really low. For instance, for my MSA, they list that only 10 SARs were filed in 2012, but 2013 lists 799. I filed over 20 by myself in 2012!
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#1943082 - 07/18/14 06:43 PM Re: New FinCEN Publication: SAR Stats Elwood P. Dowd
kw004h Offline
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I think the numbers are just for the filings which used the "new" SAR format, thought, right? So, anything filed in 2012 using the legacy forms would not be included.

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#1943089 - 07/18/14 06:47 PM Re: New FinCEN Publication: SAR Stats Elwood P. Dowd
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I'm underwhelmed. Same report, different font and a spreadsheet. With all of the new fields we're "asked" to provide, they should be returning more useful data by drilling down, cross-tabbing fields (e.g. Number of SARs by Transaction type and Category), and giving the audience more extensive metadata to play with.

Also, I'm fine with them chiding reporters misusing "Other" checkboxes by putting in vague terms or ignoring pre-existing selections, but their "rant" on how "Kiting" is not specific enough is ludicrous. They have the data! They should be able to tell if the kiting is performed with one transaction type or a combination of two or more. If they're that insistent upon it being done that way, maybe they should bring back the "Check Kiting" box! Especially since it's SOOO easy for them to do now.
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#1943094 - 07/18/14 06:51 PM Re: New FinCEN Publication: SAR Stats Elwood P. Dowd
Dani York, CRCM Offline
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I don't think so. 17 of mine from 2012 were on the new format. Also when I look at my county numbers compared to the MSA, my county lists more than my MSA. My MSA includes my entire county plus portions of 3 adjacent counties. I think the 2012 numbers are just wrong.

Only really matters if you are using this report for trend analysis, but does make me question the validity of the 2013 numbers. Also, makes me a little worried about how regulators will view the erroneous trends.
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#1943220 - 07/18/14 08:45 PM Re: New FinCEN Publication: SAR Stats Elwood P. Dowd
SeekingKnowledge Offline
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Thanks for the information. Being a statistics nerd myself, I'm excited too! smile

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#1943298 - 07/19/14 03:45 PM Re: New FinCEN Publication: SAR Stats SeekingKnowledge
Elwood P. Dowd Offline
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Okay, I'm no longer pathetic because, 24 hours later, I'm no longer excited. Dani and patsfan are half a continent apart, but they're both studious. This thing appears to be cobbled together and it represents less than half the value proposition offered by its predecessor.

* Form 111? The instructions to the FinCEN SAR were amended to delete all references to its being a "form" in 2012 and the surviving "report" carries no number.

* Best Practices? The tone is pissy. To some extent, the content is unintelligible. Like patsfan, I'm intrigued at the rant on kiting (they're annoyed that banks did not say "check" kiting). If fault were to be found here it would be in the fact that they removed the "check kiting" box from the report even though it was heavily used in all prior years. (2.85% of all SARs filed, 210,820 from 2003 - 2012) The shot taken at banks who fail to indicate a type of product involved is pretty interesting when it comes from the folks who were thorough enough to include "Swap, hybrid on other derivatives" as a check box in item 39, but not list "Checking" or "Transaction" or even "Deposit" Account as an option.

* The SAR Narrative Spotlight? Offers very little (if any) insight into writing a SAR narrative. It's simply a discussion of virtual currencies that is overly focused on Bitcoin.

* Exhibit 1 Apparently reflects the filing of the FinCEN SAR only; e.g. April, 2013 SAR filings (when use of the FinCEN SAR became mandatory) were three times the number filed in February, 2013.

* Exhibit II The rows are totaled, but not the columns. Presumably the column totals match those in the preceding exhibit, but, as it is, it's just a count of the number of reports filed by state in a 22 month period. The ppt "heat maps" are available at the state level and still represent a good training resource, but the 22 month time frame they reflect muddies the water. There are several zip codes in my state that are glowing red that have never shown that much intensity before. As the "heat" is generated by the actual SAR count in each zip code, that has to be because this map is based on 22 months worth of activity rather than 12 as prior maps have; it's a misleading distortion.

* Exhibit 3 Again, the statistics cover a period of 22 months; they cannot be compared to statistics based on prior calendar years.

* Exhibit 4 Not a function of the publication, but of the report's design, what difference does it make that "Fraud Other" was checked on 3.9% of the SARs filed in a 22 month period? Based on the explanation of how the counts are accumulated, that might have been the only box checked on some reports, but one of several boxes checked on others. What does it prove or even suggest?

This is a "do over."
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#1943493 - 07/21/14 05:15 PM Re: New FinCEN Publication: SAR Stats Elwood P. Dowd
BSA Therapy Offline
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Ken, thanks for the overview! How is everyone using this to educate management and the board, or are you using this?
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#1943577 - 07/21/14 05:54 PM Re: New FinCEN Publication: SAR Stats Elwood P. Dowd
Dani York, CRCM Offline
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I used to use the heat maps (included them as an appendix to my risk assessment). With all the number issues this year, I don't know that I'll be adding it this year.
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#1950232 - 08/07/14 04:25 PM Re: New FinCEN Publication: SAR Stats Dani York, CRCM
Elwood P. Dowd Offline
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Quote:
The ppt "heat maps" are available at the state level and still represent a good training resource, but the 22 month time frame they reflect muddies the water.


Well, I'll be jiggered... They've altered them to cover the calendar year! Thanks guys!!
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#1975436 - 11/10/14 01:20 PM Re: New FinCEN Publication: SAR Stats Elwood P. Dowd
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Last evening a FinCEN speaker at ABA/ABA MLEC mentioned that "kiting" can mean "check kiting" or "credit card kiting" as far as FinCEN is concerned; banks reporting kiting should indicate which is being reported.

Also, common errors on SARs include:

* Inserting the bank's address in the field requesting the bank's legal name [?]
* Omitting RSSD's where requested
* Inadequate narratives
* Incomplete narratives
* Use of prohibited formatting in the narrative
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#1975439 - 11/10/14 01:47 PM Re: New FinCEN Publication: SAR Stats Elwood P. Dowd
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Credit card kiting, eh? Are any funds "floating", y'know, like a kite? I'd love to hear their explanation of that scheme. Sounds more like a bust-out scheme, a gaming of the rewards system, or maybe bad check writing if the suspect is exceeding their limit.
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#1975592 - 11/10/14 11:01 PM Re: New FinCEN Publication: SAR Stats Elwood P. Dowd
Matt_B Offline
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We just got a notice from one of our insurance companies about using caution accepting ACH payments for CCs and making the payment effective immediately. They were describing an uptick in claims where consumers were originating fraudulent ACH payments, inflating the available balance of the card, then doing cash advances to get it back out. In one case, a $15,000 limit card with no balance had a $20,000 payment applied via ACH, and suddenly had a $35,000 available balance which was then advanced to the consumer. The bond company wanted to specify that applying instant payment credit like this was a risk they did not insure smirk They referred to it as CC kiting.
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#2044134 - 10/14/15 03:39 PM Re: New FinCEN Publication: SAR Stats Elwood P. Dowd
Elwood P. Dowd Offline
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SAR STATS (October, 2015) I still cannot figure out a constructive use for the break down of text box data it contains. However, they did restore the heat maps (based on a calendar year) for the state by state listings. Always helpful in convincing the board that yours is not the only bank in the state that files SARs.

There is review of completion errors that echoes those mentioned above. Unfortunately the banks that make the kind of mistakes they are describing aren't the banks that actually read this publication.
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#2044142 - 10/14/15 03:55 PM Re: New FinCEN Publication: SAR Stats Elwood P. Dowd
edAudit Offline
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You are here
The 2012 (tab1) data does not appear to be correct
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#2044276 - 10/14/15 08:06 PM Re: New FinCEN Publication: SAR Stats Matt_B
John Burnett Offline
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Originally Posted By Matt_B_1570
We just got a notice from one of our insurance companies about using caution accepting ACH payments for CCs and making the payment effective immediately. They were describing an uptick in claims where consumers were originating fraudulent ACH payments, inflating the available balance of the card, then doing cash advances to get it back out. In one case, a $15,000 limit card with no balance had a $20,000 payment applied via ACH, and suddenly had a $35,000 available balance which was then advanced to the consumer. The bond company wanted to specify that applying instant payment credit like this was a risk they did not insure smirk They referred to it as CC kiting.


There was a money laundering case years ago in which payments to an Amex account (I believe) were made in varying amounts by drug pushers paying for product. They drove the card balance negative by huge amounts. Then the ringleader used the credit balance to purchase all sorts of merchandise for resale, laundering the drug money through the account.
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#2044277 - 10/14/15 08:06 PM Re: New FinCEN Publication: SAR Stats Elwood P. Dowd
John Burnett Offline
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It was a "funnel" account before its time.
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