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FinCEN should allow some SARs latitude CUNA
WASHINGTON (6/9/09)--The Credit Union National Association (CUNA) in a comment letter presented its interpretation of recent Financial Crimes Enforcement Network (FinCEN) guidance on Suspicious Activity Report (SAR) confidentiality rules. In proposed interpretive guidance, FinCEN would allow financial institutions to share SAR information with U.S. affiliates, but would restrict them from sharing that same information with branches located outside of the United States. SARs are intended for use by government and law enforcement officials to combat money laundering and terrorism financing. In the letter, CUNA said that while it supports the FinCEN’s interpretation of sharing guidelines under the proposed SAR confidentiality rules, relaxing those rules to allow U.S.-based financial institutions to share SAR information with their foreign branches would enhance enterprise-wide Bank Secrecy Act compliance and would “assist in the overall goal of detecting and reporting money laundering and terrorist financing within the institution on a global scale.” Credit unions that serve the military, diplomatic groups and other international organizations would benefit from this change, CUNA added. Further, the disclosure risk presented by relaxing these potential rules would be no greater than the risk under prior guidance that allows sharing between U.S. branches of a foreign bank or a U.S. bank or credit union and related head offices or controlling companies that are based outside of the U.S. In a separate letter, CUNA said that it generally supports FinCEN’s broader interpretation of the SAR non-disclosure prohibition, as well as the proposed rule’s clarification regarding permissible SAR or SAR information disclosures by financial institutions. FinCEN’s proposed rule also includes a number of "rules of construction" that seek to address issues that were not clarified by existing SAR non-disclosure prohibitions. However, CUNA does note that FinCEN should provide additional clarity under the "rules of construction" regarding the distinction between SAR information protected under the non-disclosure rules and underlying facts, which are not protected. Finally, CUNA said it generally supports the proposed rule’s compliance provision. However, CUNA believes that the provision’s treatment of issues regarding third party independent audits for BSA compliance should be clarified. For full text of the comment letters, use the resource link below.
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