CUNA Regulatory Comment Call
November 7, 2002
Changes to Suspicious Activity Report (SAR) Form
EXECUTIVE SUMMARY
- The Treasury’s Financial Crimes Enforcement Network (FinCEN), NCUA, and the other 4 federal financial institution regulators are soliciting comments regarding revisions to the Suspicious Activity Report (SAR) in accordance with the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act). The agencies believe that the revisions will improve the usefulness of the form to law enforcement as well as to the regulatory agencies.
- No new reporting requirements are being added.
- The SAR Instructions section is being updated to conform to the wording of the Safe Harbor Provision regarding suspicious activity reporting that is contained in the USA PATRIOT Act. Section 351 of the USA PATRIOT Act, which amends 31 U.S.C. §5318(g)(3), has the following provision regarding liability for disclosures: “Any financial institution that makes a voluntary disclosure of any possible violation of law or regulation to a government agency or makes a disclosure pursuant to this subsection or any other authority, and any director, officer, employee, or agent of such institution who makes, or requires another to make any such disclosure, shall not be liable to any person under law or regulation of the United States, any constitution, law, or regulation of any State or political subdivision of any State, or under any contract or other legally enforceable agreement (including any arbitration agreement), for such disclosure or for any failure to provide notice of such disclosure to the person who is the subject of such disclosure or any other person identified in the disclosure.” The Act further provides that the previous paragraph “shall not be construed as creating … any immunity against, or otherwise affecting, any civil or criminal action brought by any government or agency of government to enforce any constitution, law, or regulation of such government or agency.”
- The current SAR form states in the Instructions section: Specifically, the law provides that a financial institution, and its directors, officers, employees and agents, that make a disclosure of any possible violation of law or regulation, including in connection with the preparation of suspicious activity reports, “shall not be liable to any person under any law or regulation of the United States or any constitution, law or regulation of any State or political subdivision thereof, for such disclosure or for any failure to notify the person involved in the transaction or any other person of such disclosure.”
- The draft revised SAR form states in the Instructions section: Specifically, the law provides that a financial institution, and its directors, officers, employees and agents, that make a disclosure of any possible violation of law or regulation, including in connection with the preparation of suspicious activity reports, “shall not be liable to any person under any law or regulation of the United States, any constitution, law, or regulation of any State or political subdivision of any State, or under any contract or other legally enforceable agreement (including any arbitration agreement), for such disclosure or for any failure to provide notice of such disclosure to the person who is the subject of such disclosure or any other person identified in the disclosure.” [The phrase in bold was bolded for the purposes of this Comment Call in order to highlight the significant change/addition.]
- In addition, the revised SAR form includes 2 new check boxes in Part III - Suspicious Activity Information (Box 35, Summary Characterization of Suspicious Activity): Terrorist Financing and Identity Theft.
- Comments are due to NCUA by January 3, 2003. Comments should be sent to Mr. Neil M. McNamara, Clearance Officer, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. You may fax your comments to NCUA to (703) 518-6489 or e-mail them to mcnamara@NCUA.gov. Please submit your comments to CUNA by December 13, 2002. Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Associate General Counsel Mary Dunn at mdunn@cuna.com or to Senior Regulatory Counsel Catherine Orr at corr@cuna.com; or mail them to Mary and Catherine in c/o CUNA’s Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, DC 20004-2601. To obtain a copy of the draft SAR form, please contact us or go to the following Internet address: http://www.fincen.gov/sar_form_notice_112002.pdf.
QUESTIONS REGARDING THE PROPOSAL
- Do you believe the proposed changes to the SAR form would serve to improve the usefulness
of the form to law enforcement as well as to NCUA?
Yes ______ No ______
Please explain why or why not.
- Are there additional/other ways to enhance the quality, utility, and clarity of
the information to be collected on the SAR form?
Yes ______ No ______
If yes, what are those additional/other ways to improve the information collection?
- Are there ways to minimize the burden of the collection of information on credit
unions submitting an SAR, including through the use of automated techniques or
other forms of information technology? [On October 2, 2002, FinCEN initiated the
PATRIOT Act Communications System (PACS). PACS will enable financial
institutions that must file under the new anti-money laundering provisions of the USA
PATRIOT Act to send SARs and Currency Transaction Reports (CTRs) via a highly
secure Internet service. The PACS website can be found at
http://pacs.treas.gov/index.jsp.]
Yes ______ No ______
If yes, what are those ways to minimize burden?
- Other comments?
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Eric Richard • General Counsel • (202) 508-6742 • erichard@cuna.com Mary Mitchell Dunn • SVP & Associate General Counsel • (202) 508-6736 • mdunn@cuna.com Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 • jbloch@cuna.com Catherine Orr • Senior Regulatory Counsel • (202) 508-6743 • corr@cuna.com |
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