I am dismayed to discover we have been routinely reporting the source of funds and use of funds, even when that activity has nothing to do with the suspicious activity.

Is this a new requirement? I've been away from BSA for several years. I don't see anything changed in the regulation that says we are to report on additional activity that is NOT suspicious.

Example: Reporting of 7 transactions that appear possibly structured. Can and should a bank also say "The rest of the activity in the account was debit card purchases at Home Depot" or "There was also a $25,000 check from a title company" if those debit card and deposit transactions were NOT suspicious?

And I'm not talking about "helping out law enforcement." I'm seeking the actual written regulatory requirement we must fulfill, without divulging information that is not suspicious.

Hello Barry, as you know, the purpose of an SAR is to report suspicious activity so you are correct that the inclusion of any information that is not relevant (suspicious) or helpful to law enforcement just muddies the water and wastes your limited time.

"BSA Barry" here: I agree 100%. I also find that our legal ability to report suspicious activity is limited to transactions we determine to be suspicious. However, there's this "guidance" from FinCEN:

"Collecting Information for the SAR Narrative
....
What instruments or mechanisms are being used to facilitate the suspect transaction(s)?
An illustrative list of instruments or mechanisms that may be used in suspicious activity
includes, but is not limited to, wire transfers, letters of credit and other trade instruments,
correspondent accounts, casinos, structuring, shell companies, bonds/notes, stocks, mutual funds,
insurance policies, travelers checks, bank drafts, money orders, credit/debit cards, stored value
cards, and/or digital currency business services.
In addition, a number of different methods may be employed for initiating the negotiation of
funds such as the Internet, phone access, mail, night deposit box, remote dial-up, couriers, or
others. In summarizing the flow of funds, always include the source of the funds (origination)
that lead to the application for, or recipient use of, the funds (as beneficiary). In documenting the
movement of funds, identify all account numbers at the financial institution affected by the
suspicious activity4 and when possible, provide any account numbers held at other institutions
and the names/locations of the other financial institutions, including MSBs and foreign
institutions involved in the reported activity."


My colleagues have interpreted that to say "always include the source of funds...and use of funds" in the SAR Narrative. Instead, I would say it says to describe it in so far as it is suspicious.

For example, if the transaction was a wire transfer, you'd include the date, sender, sending bank, and all relevant details; you might also look if cash for the same amount happened around the same time. But what you wouldn't do is say "The customer also has retirement deposits every month from Dingo Breeders 'R Us."

the purpose of the SAR is to report suspicious activity, not to give a recap of every transaction flowing through an account, only the suspicious one. No one wants to see that John Q Crook spends $200 per month at wall-mart and kroger for groceries.

Where's that guidance? do you have the link? I have a coworker who disagrees and I have been looking for a source document.
thanks for sharing.

Suspicious activity is detailed (In total dollar amounts) prior to the narrative. During the narrative it would be appropriate to explain non-suspicious activity to provide a complete flow of funds. For example, you may file a SAR on cash withdrawals conducted in a manner suggestive of structuring to avoid CTR report. You could also stated that these withdrawals were funded by a wire from XX Bank.

The dollar amount reported pre-narrative should match the cash withdrawals. A flow of funds analysis is helpful to LE so they have an idea as to where the money went or where it originated from.

I completely agree with ACBbank. We have several situations as described above where we only mention a transaction in the narrative and state we don't find that transaction specifically suspicious but feel it would be helpful in providing a "big picture" overview or the customer profile/history. Have never been criticized for handling that way either.

That would make the non-suspicious transaction discoverable. (not that it is a bad thing)

Kind of like the supporting documentation we mention that is available for review upon request.