I am working on filing a SAR due to an exam finding.

We didn't detect the activity until the examiner brought it up, but the activity started 5 months ago. What do I use for date of determination? We didn't detect it the examiner did. Do I use the date the examiner notified us? Or do I need to state the date five months ago because we should have known at that time?

Do I need to state in the narrative that we are filing due to an exam finding? Or would I just complete as normal?

The date of detection was the date of detection - that is a fact based date, not based on a "what if". Law enforcement does not care who found it.

Also, unless was an egregious miss and not just a disagreement as to whether you should have filed or not, I would be protesting the filing. If you let it stand, another miss next time is an automatic MOU.

Is this an isolated incident? A single SAR filing could lead to some type of finding, but as Randy mentioned multiple missed SARs will almost always lead to a violation.

It was a complete one-off situation.

I would absolutely protest the finding. Examiners may suggest a SAR filing but cannot make your decisions for you. If there was a procedural error that caused you to miss one, they may have you address that, but I always push back on examiners telling me something should have been filed on.

Hey OP, there is only one reason an examiner would ever want to persuade you to file a late SAR: they are trying to persuade you to violate the BSA. It's a "gotcha" exam being conducted with hostility. If you decide no SAR is needed and document your reasoning, there is no violation and I believe there is nothing else they can say on the matter. Send them that decision in writing, and call their bluff.

I believe their exam procedures require them NOT to direct you to file a SAR, in fact, and they are violating their own policies by using this pressure on you. If you cave, and file the SAR, you are committing a BSA violation (for late filing, right? No way would they be having this conversation about activity that occurred within the past 30 days - no, this is something from at least 90 days ago, right?), and for that violation or series of violations they will seek to write you up for it or punish the bank for it with more frequent, more burdensome exams, and more burdensome requirements going forward.

Let me tell you our story:

We had an examiner who more or less made up his own requirements. For example, he used a red flags checklist from over 15 years ago. This list is no longer online, but he had a copy on his computer. This is a list which had been completely replaced by later publications. One of the so-called red flags from the obsolete version of the checklist was for something pretty pointless, which should in no way ever lead to a SAR. The invalidity of the "red flag" is evident in the fact that it does not appear on more recent versions of that agency's red flags lists. He insisted we needed to file about 3 SARs for this activity, and no one involved at the bank at that time was capable of arguing it down, or facing off with him, or refusing to file based on the fact that it is the bank, not the regulator, who decides what is suspicious. He (verbally only) phrased it like "File the SAR on these transactions or I'll be filing the SAR against your bank and BSA Officer." That's a phrase that should never be used for a scenario like this.

The BSA Officer filed the SARs. Following their advice, he failed to specify in the SAR that this was being filed because an examiner insisted the activity was suspicious. We were told that writing that in the SAR would be wrong because we should only be filing SARs for things we think are suspicious, not things they just tell us are suspicious (but, that if we didn't think it was suspicious, they would conclude there was something wrong with our BSA program and decision-making process!).

Filing those SARs triggered a change in our exam cycle, such that rather than coming about every 2 years or so, they started coming every 6 months. It also led to a perpetual need to perform a very time-consuming review to look for more of those same pointless red flags.

If our decision today was that the activity is not suspicious, I'd document our decision in writing, and email it to the EIC. Then sit back and wait, with confidence, that their pressure on us to file will evaporate. I'd also forward a copy to the Ombudsman of that regulatory agency.

P.S. One more mistake from that prior exam: rather than this being a conversation between BSA and the BSA examiners, the BSA department allowed management to be dragged into the conversation. Entire group meetings were held around these obsolete red flags.

Bear in mind, your senior management is probably excellent at being deal-makers. They'll see it as a "deal" - and a good one - if they are persuaded that all the bank has to do is just go ahead and file a few pages of meaningless reports, and then the exam will come to an end, and the rating will still be good overall. That's a win-win, from the perspective of management. So my advice would be that this discussion should be limited to your compliance department. If the examiners want to try to go "over your head" then that's another "red flag" about what kind of examiner you're dealing with, because at pretty much any bank, it's the people in compliance, not people in other senior management positions, who determine what is suspicious. It is the job of compliance (your job, if that's your area) to handle this, without dragging senior management into it.

If a meeting has to occur, I'd counsel management before the meeting to let compliance do 100% of the talking, and only be there for a show of support, without attempting to cut any plea bargains.

FWIW if an examiner threatens to file a SAR on a bank employee, and it's not legitimate, you need to push back. At a former employer they tried this with our GC and he was outraged and had his personal attorney contact the examiner and the regulator and let them know they would need to show up in court if they went this route. There is much more to this but that threat vanished very quickly.

That's another good point. Another thing I wanted to mention here is that in a sense, there is no such thing as a BSA exam. Instead it is just a portion of the bank's Safety and Soundness exam. So when you or your management is considering caving to a demand to file a SAR, look at it from that perspective: are you willing to agree that your bank is not Safe and Sound? If the answer is no, you should never file a SAR on something that you don't think is suspicious, just because an examiner is trying to force you to do it.