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#666439 - 01/16/07 03:41 PM "Out of Trust" - 90 Day SAR
hawkfan Offline
Member
Joined: Feb 2006
Posts: 83
About a month ago we filed a SAR for an auto dealership being "out of trust". This was discovered upon a routine floorplan check. Well about a month later it happened again. Do we file a SAR right away or can/should we wait 90 days and then file the SAR covering the whole period?

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#666502 - 01/16/07 04:34 PM Re: "Out of Trust" - 90 Day SAR hawkfan
Bobw Offline
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Bobw
Joined: Nov 2006
Posts: 336
New England
If you have new information on another event, I don't think I would wait the 90 days and file now
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just my opinion, based on my 30+ years

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#666950 - 01/16/07 11:03 PM Re: "Out of Trust" - 90 Day SAR Bobw
BSA4LIFE Offline
Gold Star
Joined: Nov 2003
Posts: 284
California
I would wait. The purpose of the 90 day renewal is to report if the activity is continuing. Example: If you had reported on structuring, you wouldn't send in a new SAR every time they made a new deposit that you considered structured. Just my opinion.

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#666976 - 01/16/07 11:27 PM Re: "Out of Trust" - 90 Day SAR BSA4LIFE
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,292
The one difference with out of trust dealer situations is that this is a crime that puts the bank at risk of a financial loss. You can still wait the 90 days, but the bank had better also be right on top of the situation with an investigation and a plan for how to handle. Your regulator will inquire as to how it was handled when they review your SAR files.

Out of trust situations have been known to put a dealer out of business when allowed to get large enough, and can create a significant charge off for the bank with little hope of recovery.
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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
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#666984 - 01/16/07 11:38 PM Re: "Out of Trust" - 90 Day SAR BSA4LIFE
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 80,325
Galveston, TX
Are these wholesale situations were you believe that there is fraud involved or is this an oversight or bookkeeping problem with the dealer? If this is wholesale fraud, why is the customer still a customer? Why is the bank not physically holding all the titles to the vehicles and only releasing them on sale? If that is happening, the dealer is in violation of State laws in most states. This shows that there are more weaknesses in your processes than just worrying whether or not when to file a SAR and puts your bank at financial risk. I have seen situations like this cost banks big bucks.

KB - great minds think alike - you just type faster than I do
Last edited by rlcarey; 01/16/07 11:39 PM.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#668789 - 01/19/07 05:28 PM Re: "Out of Trust" - 90 Day SAR rlcarey
hawkfan Offline
Member
Joined: Feb 2006
Posts: 83
Management and loan staff keep track of the situation regularly. They are not worried about the situation or the borrower. In all cases, the cars were paid of 7-14 days after when it said they should have been. It appears to be not a problem, but when the examiners were here they said we have to file a SAR when the dealership is officially "out of trust". Management is well aware and is confident there will be no loss. I am just trying to figure out if I should file again or wait 90 days.

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