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Department News COMPLIANCE


Back to Basics With Suspicious Activity Reporting By Bryan Bradley, CRCM, Vice President of Compliance Services


Often times in banking or any other profession, we have a tendency to overcomplicate things. Te topic of identifying and reporting suspicious activity is no exception. Suspicious Activity Reports are an essential tool for law enforcement to assist them in identifying, catching and prosecuting the “bad guys.” As bankers, each of you play a role in your bank’s suspicious activity monitoring program. Following are a few “basics” surrounding this program.


First, time is of the essence! When identifying suspicious activity happening at or through your bank, do not sit idly by and think someone else has it covered. Te Bank Secrecy Act rules and regulations require banks to file an initial SAR, when applicable, either within 30 or 60 calendar days, depending on the known identity of the SAR subject(s), from the date of the initial detection of facts that may constitute a basis for filing a SAR. Does that mean the “clock” begins as of the time a particular transaction occurred? Not necessarily. Te BSA Examination Manual provides some helpful insight. Te manual states, “Te 30-day (or 60-day) period does not begin until an appropriate review is conducted and a determination is made that the transaction under review is ‘suspicious’ within the meaning of the SAR regulation.” However, any bank employee who may initially detect potentially suspicious activity should promptly communicate the detection to appropriate management and/or the BSA officer. Just because the rules clarify that the initial detection may not start the clock, the bank still has an obligation to make its SAR determination in a timely manner. So, when you see it, report it to the BSA officer so he/she can make that final determination within the timing guidelines.


Second, when referring potentially suspicious activity to the BSA officer, be as thorough as possible with the details. As noted below, the level of details can affect the impact of the


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SAR filing to law enforcement. Many banks use a “Suspicious Activity Referral” form to assist staff in making SAR referrals. At its minimum, the form should address the following. • identify the subject(s), if known • a description of the suspicious activity (i.e., dates, times, amounts, locations, methods used, comments made, etc.)


• why the activity appeared to be suspicious to the employee • employee making the referral • BSA officer’s final determination as to whether a SAR is necessary


• the date the bank determined a SAR is required to be filed


Tird, one of the most impactful sections of the SAR form is the “narrative.” Tis is where the story is told. Te difference between a great and poor narrative could result in the SAR being overlooked by law enforcement, so make it matter! Te SAR form instructions serve as an excellent source on what to mention in the SAR narrative. Because space is limited, remember to cover the who, what, when, where, why and possibly how. Be descriptive to the point that the reader can instantly determine what took place and, more importantly, why the activity is considered suspicious. Tink back to your younger school days of writing a book report. Begin with the introduction of the activity, then the details and finish with the conclusion, which should bring home why the activity is suspicious. In other words, the goal is that other readers should come to the same conclusion as you did.


So, go forth and channel your own version of Detective Columbo or Sgt. Pepper Anderson (Google it) the next time you encounter something suspicious at your bank.


This article is for information purposes and does not contain or convey legal advice. The information should not be used or relied upon in regard to any particular situation without consultation with your bank attorney. MBA Compliance Services and its Compliance Force program offer various programs to aid banks with compliance needs. For more information, call 573-636-8151.


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