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#905333 - 02/14/08 10:38 PM Filing SARs for "unusual" rather than "suspicious"
Compliance Mom Offline
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Joined: Apr 2003
Posts: 45
Tennessee
We are wrapping up our BSA exam, and our FDIC examiner is telling us to file SARs on one time large cash out transactions conducted by individuals because it "doesn't make sense" for an individual to walk out with that much cash. He's basically referring to anything $20k and up. Is anyone else being forced to file so broadly?

We've been told our thinking needs to change and we shouldn't reason that the person might have a legitimate need for that much cash. We are a fairly large institution and have more than just the occasional large transaction that cannot be explained. But my understanding was that SARs were for suspicious activity. Or maybe the 'S' in SAR has been changed to stand for Senseless.

Anyone else filing for every large unusual one-time transactions?
Last edited by Compliance Mom; 02/14/08 10:42 PM.
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#905403 - 02/15/08 12:35 AM Re: Filing SARs for "unusual" rather than "suspicious" Compliance Mom
DebL Offline
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Joined: Jan 2007
Posts: 314
CA
Did they only say that you should file on large cash out transactions? That seems ridiculous because you can look at the account to see how the funds got there in the first place. If they look legitimate, why would you consider someone taking their own money (and completing a CTR) to be suspicious?
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#905404 - 02/15/08 12:37 AM Re: Filing SARs for "unusual" rather than "suspicious" Compliance Mom
WonderWoman Offline
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Joined: Mar 2007
Posts: 2,108
gone fishin'
No.

I usually make a statement on my SAR "not filed" sheet - something like - "although the transaction appears unusual, based on all the facts, it is deemed the transaction was not suspicious in nature or done to avoid reporting requirements/hide/disguise funds or assets"

Then I usually put something like "the account will be monitored over the next 90 days."

As long as I'm confident in my explanation - I've never had a problem with examiners before ... but I've heard other people have experienced the same scenario as you ...
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#905523 - 02/15/08 02:32 PM Re: Filing SARs for "unusual" rather than "suspicious" WonderWoman
rlcarey Offline
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Joined: Jul 2001
Posts: 79,310
Galveston, TX
Your examiners are nuts. Tell them to reread the examination manual - page 66:

"The decision to file a SAR is an inherently subjective judgment. Examiners should focus on whether the bank has an effective SAR decision-making process, not individual SAR decisions. Examiners may review individual SAR decisions as a means to test the effectiveness of the SAR monitoring, reporting, and decision-making process. In those instances where the bank has an established SAR decision-making process, has followed existing policies, procedures, and processes, and has determined not to file a SAR, the bank should not be criticized for the failure to file a SAR unless the failure is significant or accompanied by evidence of bad faith."

If you identify these transactions and come to a conclusion that while unusual, you have no reason to suspect that it involves money laundering, terrorist financing or other illegal activity - then to criticize you for not filing is ridiculous.

Kick this issue up the line. A finding like this in a report is going to have severe consequences in future exams if they find anything legitimate, because additional findings in future examinations require further actions, such as cease and desist orders.
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#905631 - 02/15/08 04:00 PM Re: Filing SARs for "unusual" rather than "suspicious" rlcarey
MidMOAuditor Offline
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Missouri
That is a completely rediculous request and based on the examiners own opinion.

Originally Posted By: rlcarey
If you identify these transactions and come to a conclusion that while unusual, you have no reason to suspect that it involves money laundering, terrorist financing or other illegal activity - then to criticize you for not filing is ridiculous.


What Randy said is exactly right.

Just because someone takes an excessive amount of cash doesn't mean it's "a suspicious transaction relevant to a possible violation of law or regulation." Filing a SAR is not based on a set of guidelines such as cash out in excess of $20,000. You might explain to Mr. Examiner that you have account monitoring reports and a large transaction report for a reason and how those all tie in together.
Last edited by MidMOAuditor; 02/15/08 04:00 PM.
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#910085 - 02/25/08 09:31 PM Re: Filing SARs for "unusual" rather than "suspicious" MidMOAuditor
Compliance Mom Offline
Junior Member
Joined: Apr 2003
Posts: 45
Tennessee
I think his opinion can be summed up as follows: If we cannot prove a customer had a legititmate reason to leave the bank with a large amount of cash, ie. 15-30 k, then we must view it as unusual, which would make it suspicious, which would trigger a SAR filing.

That's the way we've been instructed to approach it, anyway.

The troubling thing about it is we really like this examiner. He's well respected among banks in our area and is generally very level headed about the whole process. He frequently visits DC and I'm wondering if he's just passing on what he's been told....

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