The federal government underestimates the amount of time and resources community banks dedicate to reporting suspicious activity, the Independent Community Bankers of America (ICBA) told the Financial Crimes Enforcement Network (FinCEN). In a new comment letter and separate joint letter with other financial industry groups, ICBA stated that FinCEN’s estimate that each suspicious activity report (SAR) takes roughly 1.98 hours to file is significantly undervalued.
“The current outdated framework is an exercise of investigating and completing forms and strictly adhering to policies and procedures developed from regulatory requirements rather than making an impact in combating financial crime,” ICBA Senior Vice President and Senior Regulatory Counsel Rhonda Thomas-Whitley wrote in ICBA’s letter. “These regulations also lessen community banks’ ability to attract capital, support the financial needs of their customers, serve their communities, and contribute to their local economies as many do not have dedicated legal and compliance departments. Adjusting the SAR threshold will produce more useful information for law enforcement while alleviating one of the most significant and costly sources of community bank compliance burdens.”
In its letters to FinCEN on a proposal to renew SAR information collection standards without change, ICBA:
- Urged FinCEN to take a comprehensive approach to calculating all the factors that determine the amount of time it takes to process an SAR, including monitoring and reviewing documentation and account activity, interviewing personnel, reviewing the investigation, completing and documenting SAR forms, and conducting additional documentation and record-keeping after filing.
- Reiterated its support for increasing the SAR reporting threshold to $10,000, which will emphasize quality over quantity in information collection, produce more useful information for law enforcement, and alleviate one of the most significant and costly sources of community bank compliance burdens.
- Noted that SAR filings are part of a cumbersome regulatory environment that hampers community banks’ ability to attract capital, support their customers' financial needs, serve their communities, and contribute to their local economies.
ICBA’s comment letter and joint letter are available on its website.
The Independent Community Bankers of America® has one mission: to create and promote an environment where community banks flourish. The organization powers the potential of America’s community banks through effective advocacy, education, and innovation. As local sources of credit, America’s community banks leverage their relationship-based business model to channel deposits into neighborhoods they serve—creating jobs, fostering economic prosperity, and fueling customers’ financial goals.
For more information about ICBA's initiatives or access to their letters regarding SAR reporting standards visit icba.org.
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