WASHINGTON (5/7/09)--The Credit Union National Association (CUNA) has issued a comment call on a proposed rule change that would clarify the scope of confidentiality prohibitions for Suspicious Activity Reports (SARs) and harmonize the current regulations. The changes, proposed by the Financial Crimes Enforcement Network (FinCEN), would also address a prohibition against the disclosure of a SAR by the government, clarify that standards applicable to government SAR disclosures are consistent with the goals of the Banker Secrecy Act (BSA), and incorporate elements of the USA Patriot Act into current safe harbor provisions. FinCEN has also proposed separate guidance addressing the sharing of SARs with some affiliates. Under the proposal, individuals and organizations would be prohibited from disclosing the existence of a SAR target or any information regarding a SAR filing to any person or organization, with, however, limited exceptions. Potential exceptions to this rule include the disclosure of any underlying information that could be discoverable under the Federal Rules of Civil Procedure and any information that should be used to fulfill financial reporting or Bank Secrecy Act (BSA) monitoring needs. The proposal would also prevent financial institutions and their employees from using SAR confidentiality prohibitions to obstruct the investigations of regulators or federal, state or local law enforcement. Among the issues CUNA is asking credit unions to comment on are:
* Whether the terms or provisions used for consistency across financial institutions are inappropriate for any one type of financial institution based on its specific characteristics; * If any important provisions from the existing regulations have been unintentionally or inappropriately eliminated or confused by the proposed regulations; * What additional or alternative methods could be used to strengthen the confidentiality of SARs; and * If some of the regulations should be revised to increase consistency between the various rules.
Financial institutions are required to file a SAR if any insider abuse, money laundering, or other violations of the BSA are discovered or suspected. Comments are due to CUNA by May 22. They are due to FinCEN by June 8. To read CUNA's Comment Call or the SAR report proposal, use the links below.