When is it permissible to contact local law enforecment about the filing of a SAR?

You should never tell anyone that you have filed or will be filing a SAR.

Why is there a place on the SAR to report if local law enforecement was contacted????

My understanding is that you contact local law enforcement about the suspicious or illegal activity (if you dtermine this is necessary). You don't have to tell them you filed a SAR when doing this, you basically are telling them the information that is in the SAR though.

So, local law enforement can be contacted, but not to tell them that a SAR has been filed, but only to let them know of suspicious activity that may be taking place? I am suspicious of a customer dealing drugs in the local community, and yes, I do want to let local law enforcement know this. I have the right to do so.....correct???

Yes you can. It is up to them whether or not they will puruse it or not. It is possible that they might have other leads/tips for the same suspects.

Anyone can correct me if I am wrong.

All of the bank regulatory agencies have similar language in their SAR filing regulations, but here's the relevant excerpt from the FDIC's:

(c) Reports to state and local authorities. A bank is encouraged to file a copy of the suspicious activity report with state and local law enforcement agencies where appropriate.

Note the word, "encouraged." That's pretty unusual language in a federal regulation, but it's clearly left up to you.

It's worth noting that state and local law enforcement agencies have access to SAR information through the Gateway program. In short, there is no practical need to give them a paper copy of the SAR. If you tell them the SAR was filed they have access to the system and can search for SARs filed by your bank. However, if you file on paper this particular SAR may not be in the system for several weeks.

Also, several states have statutes of their own that directly deal with a bank's reporting of suspected violations of law. It's important to determine whether your state has such a statute and allows or encourages such disclosures to state or local LEAs.

A critical point regarding the existence of the federal safe harbor for reporting suspicious activity: You have to file the SAR before your disclosures are protected. If you provide information to state or local law enforcement before you file a SAR, any protections you may have are under state, not federal, law.

In candor, your SAR filing policy should indicate whether your institution will file copies with state and local law enforcement agencies so these decisions are not made in "one off" situations.

From SAR Activity Review: "...financial institutions may share a Suspicious Activity Report, or the information contained therein, with an appropriate federal, state, or local law enforcement agency. Generally, an “appropriate law enforcement agency” is any agency that has jurisdiction under federal or state law to investigate or prosecute any person or entity involved in the transaction reported on the Suspicious Activity Report."

The new BOL SAR research guide is very helpful in finding answers to the SAR questions we have to address almost daily. It is definitely worth your time to take a look. Great tool, BOL, THANKS!

Great posts!!! Thanks to everyone for your help on this one!!!

I love BOL!!!!