One company was using another's company to process their payroll. The one business has an origination agreement with us but the other didn't (until we found out and made them get their own). Both are customers. Management wants a SAR filed. I'm not sure which categories this falls under on the SAR. ACH fraud? The companies are owned by some of the same people so they knew one was using the other's agreement.

Since when is violating a contractual agreement with the bank a criminal offense?

Which is why I'm not sure how to file. I don't think it is criminal just poor judgement and some way to avoid fees, really. President however sees it differently.

If he feels that way, I am sure both companies have been kicked to curb and are not longer customers then??? Why would he continue to bank criminals? Without suspicions of some sort of illegal activity, filing a SAR might be considered just a vindictive act. Ask for a clarification as to what law was broken. And if they violated their contract which caused you to lose fees, then demand payment and sue them if they don't pay.

in the ACH world, one company that originates payroll for another company is called a "3rd party payment processor" or a "3rd party sender" and is not only legal, it is allowed per NACHA Rules. There is no SAR issue here. Before your president goes and does something stupid that can create a legal issue for the bank, i'd suggest you contact your local ACH payment association, or NACHA directly, to have them explain how this is legal. if you have a copy of the 2019 NACHA Rules, read Article 2 starting on page OR5 - better yet, have your president read it.

Don't you often wonder how some people become president's of banks?

Totally agree with Happy Gilmore, but you are likely dealing with an egomaniac. So be careful how you approach it. You can say something like, " I was doing some research on this and it appears that no criminal offense has occurred......." and then explain how it would be viewed under NACHA.

Your regulator may question why the SAR was filed. It could be construed as malicious. Besides, it's a waste of time not only for you, but on the FinCEN side as well. Maybe you can appeal to him by saying something about your efficiency ratio. LOL!

Also, you might remind this person that malicious filing is the one thing that I understand can pierce the privilege protecting SAR filings from discovery, so that such a potential silly filing could, potentially, be discoverable in litigation. Maybe that will snap this person out of their haze.