FinCEN Publishes SAR Activity Review; Credit Union Cooperatives Under the Spotlight
On Friday, FinCEN released the most recent issue of its SAR Activity Review - Trends, Tips and Issues.  The publication is always a good read for BSA junkies. But this issue really caught the eye of the Compliance Guy. This issue devotes an entire article that analyzes SARs filed by or relating to credit union cooperatives. From the article, it seems to be focusing on shared branches. Of note...
- FinCEN studied SARs referencing credit union cooperatives from June 2004 through March 2007. This amounted to 121 SARs. (Only 23 were actually filed by credit union cooperatives.)
- More than 65 percent of the SARs filed by cooperatives contained "data quality problems." More than 30 percent had blank narratives. Other mistakes included wrong addresses, lack of federal employer identification numbers, and wrong total dollar amounts.
- Structuring/Money Laundering was the most common reason for filing a SAR by the cooperatives, followed by check fraud and misuse of position.
While this article only studied a small number of SARs issued by or related to credit union cooperatives, FinCEN certainly spent a good deal of time discussing quality concerns. To me, this is a clear red flag. If your credit union is involved with a credit union cooperative as outlined in the article, you may want bring this article to their attention to make sure that SAR filings are done correctly.
***
In the same issue, FinCEN did a wonderful thing. Starting on page 34, FinCEN gives detailed explanations and examples for each category of suspicious activity appearing in Item 35 of the SAR form, and what federal statute such activity might violate. For example, credit unions should check off "bribery/gratuity" on a SAR to report "anyone who, in connection with bank business, corruptly gives, offers or promises anything of value to a bank official with the intent to influence or reward that official." This would be be a potential violation of 18 U.S.C. Section 215 (Bank Bribery Act). FinCEN does this for every category. This section would be useful to train staff about the different types of activity that may trigger a SAR filing.