Compliance Blog

Written by Shari R. Pogach, Regulatory Paralegal

Have you had a chance to take a look at the Financial Crimes Enforcement Network’s (FinCEN’s) new publication called SAR Stats?  The successor publication to The SAR Activity Review: By the Numbers, FinCEN released the first issue of this technical bulletin in July.  

FinCEN’s SAR Stats gives suspicious activity report (SAR) data for depository institutions and other industries for SARs filed between March 1, 2012 and December 31, 2013, inclusive.  SAR Stats provides statistical analyses by geography and activity type.   In addition to the technical data, there are new sections that dive deeper into how the data is being analyzed more effectively to identify new and emerging patterns, as well as compare trends across industries.

This first issue also includes a section on best practices for completing the (z)Other field on the electronic FinCEN SAR form.  Also included are illustrations of free-text entries that did not meet FinCEN’s guidance to describe the type of suspicious activity in the (z)Other field:

1. “Many (thousands) of entries lacked critical specifics by omitting the type of product or instrument used in the suspicious activity. For example, there were thousands of entries containing only the single term Kiting. This one-word subject needed vital specific descriptors that would have made it useful (e.g., Check Kiting). Specific descriptors will reveal activity trends more clearly and are more useful to law enf orcement tracking the extent of the products/instruments frequently associated with the activity, in this case, checks and credit cards.
2. Undefined entries that do nothing to describe the suspicious activity, including Excessive or Excessive Activity, Unusual or Unusual Activity, and Suspicious or Suspicious Activity, should not be used. 
3. Use of broad all-inclusive themes also should not be used as they do nothing to further put the entry into perspective: e.g., BSA/Structuring/Money Laundering or, simply, BSA, Structuring, or Money Laundering.
4. Prohibited words and phrase: None, Not Applicable, Other, Same, Same as Above, See Above, See Narrative, Unknown and XX, should not be used. Such entries are of no value.
5. Entries using dollar amounts, dates, or series of numbers are of no value. 
6. Free text entries should not be in quotes. Quotation marks comprise a difficulty in synthesizing entries. The (z)Other boxes should not be checked when the associated text field is left blank. 
7. Filers should avoid using the (z)Other field when an option already exists for that violation. For example, filers entered Elder Financial Exploitation16 in the zOther field within the Fraud category instead of checking box 35(d) (Elder Financial Exploitation) within the Other Suspicious Activities category. 
8. Text should not merely repeat the category without providing any specifics: Category: Terrorist Financing, (z)Other text entry: Terrorist Financing or Category: Fraud, zOther text entry: Fraud. The text entry in (z)Other is intended to provide more information to streamline searching.”

FinCEN reminds filers that if care isn’t used to complete the form, incorrect entries will lead to inaccurate reporting that is of no use to anyone.

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NAFCU Webcast - Prepare now for the changes in your credit union’s policies, procedures and general practices for the implementation of the Truth in Lending (TILA) and Real Estate Settlement Act (RESPA) Integrated Disclosure Rule on August 1, 2015, with this webcast Wednesday, October 1 from 2:00–3:30pm ET.  The early bird registration deadline for TILA/RESPA: Difficult Issues and Their Solution is September 24.