Suspicious activity reports (SARs) demand significant time and resources from financial institutions, far exceeding government estimates, according to a letter filed this week by the Bank Policy Institute, the Financial Technology Association, the Independent Community Bankers of America, the American Gaming Association, and the Securities Industry and Financial Markets Association. These organizations represent a wide range of institutions that file SARs and experience considerable pressure on resources.
The letter emphasized that filing SARs involves more than just completing forms. "We believe that FinCEN’s burden estimate of 1.98 hours per SAR substantially underestimates the amount of time required to thoroughly undergo the reviews and processes required under applicable requirements to file a SAR," stated the trades in their letter. They elaborated that an institution's process includes investigating reasons for filing a SAR, reviewing supporting documentation, conducting second reviews, obtaining approvals, documenting investigations and decisions, and overseeing filings.
The background for this correspondence is FinCEN's notice under the Paperwork Reduction Act seeking comments on its proposal to renew without changes the form used by financial institutions to report suspicious transactions. SARs are critical components of federal anti-money laundering efforts.
Recent survey data from BPI indicate that FinCEN significantly underestimates the time banks spend on each SAR. The survey found banks spend an average of 21.41 hours per SAR—over ten times FinCEN’s estimate of 1.98 hours. Under Section 6204 of the Anti-Money Laundering Act of 2020, Treasury is required to review reporting requirements related to SARs to reduce unnecessary burdens but has yet to issue its report or propose adjustments.
In conclusion, FinCEN is urged to accurately measure SAR demands for efficient resource utilization by both government entities and financial institutions.
Tara Payne
Bank Policy Institute
tara.payne@bpi.com
Miranda Margowsky
Financial Technology Association
miranda@ftassociation.org
Nicole Swann
Independent Community Bankers of America
nicole.swann@icba.org
Joe Maloney
American Gaming Association
jmaloney@americangaming.org
Jonathan Marcus
SIFMA
jmarcus@sifma.org