CUNA Regulatory Comment Call

November 18, 2010

FinCEN’s Notice and Request for Comments – Bank Secrecy Act Suspicious Activity Report Database Proposed Data Fields

EXECUTIVE SUMMARY

Please feel free to fax your responses to CUNA at 202-638-7052; email to Federal Compliance Counsel Nichole Seabron at nseabron@cuna.com; or mail them to Nichole in c/o CUNA’s Regulatory Affairs Department, 601 Pennsylvania Ave, NW, South Bulding, 6th floor, Washington DC 20004. You may also contact us for a copy of the regulation or access it here.

DISCUSSION

The Bank Secrecy Act (BSA) authorizes the Secretary of Treasury to issue regulations requiring persons to keep records and file reports that are determined to have a high degree of usefulness in criminal, tax, regulatory, and counterterrorism matters. The Financial Crimes Enforcement Network (FinCEN) has been given the authority to enforce BSA regulations. The BSA requires financial institutions to report suspicious transactions via the Suspicious Activity Report (SAR) and these reports are made available to appropriate agencies and organizations as permitted.

The Database

FinCEN is designing a database that can accept modernized electronic BSA reporting. The database will accept XML-based, dynamic reports. The new system will accommodate batch and computer to computer filing processes as before, however, the file format will be changed to match the database. Discrete filings will be based on Adobe LiveCycle Designer ES dynamic forms. Batch and computer to computer filers will file reports based on electronic file specifications that will be finalized after reviewing public comments in response to this notice.

All filings will be accessed through the BSA E-Filing system using current registration and log-in procedures. While logging into the discrete filing option, filers will be prompted to complete a series of questions providing information regarding the type of financial institution filing the SAR form. After log-in, the filer will then be prompted to answer additional questions appropriate for the type of institution filing the SAR. As noted above, batch and computer to computer procedures will be determined after comments to this notice have been received.

Summary of BSA-SAR Proposed Data Fields

Item 1, “Type of Filing” – all institutions are required to complete item 1.

Part 1, “Subject Information” – all institutions will complete a Part 1 for each subject. Part 1 may be repeated as necessary to cover all subjects. Institutions will provide the following information about the subject in Part 1 – subject contact information, subject identification, financial institution relationship information, and subject account information.

Part II, “Suspicious Activity Information” – this section must be completed by all filers. Filers are only required to complete those items that are applicable to their facts. There is a “select all” feature available for filers that would like to add additional information. Generally, there will be one Part II per report.

Part III, “Information Concerning Financial Institution Where Activity Occurred” – This section may be repeated as many times as needed to report an unlimited number of financial institutions and/or branches if necessary.

Part IV, ‘Filing Institution Contact Information” – this information is required for each report.

Part V, “Suspicious Activity Information Narrative” – this is a text file that is limited to 17,000 characters (approximately six pages). The new database gives institutions the ability to attach a MS Excel compatible file (no larger than 1 MB) in order to provide additional details in tabular format. Attaching the spreadsheet is optional.

A list of the proposed data fields for the BSA-SAR report can be found at the end of the FinCEN notice.

Burden Estimates

Given that the proposal does not require any substantive changes to the SAR filing requirement, FinCEN believes that the burden to financial institutions will be minimal. Accordingly, FinCEN estimates that it will take approximately 2 hours to complete recordkeeping and recording requirements using the new database. The proposal estimates that it will take filers (on average) 60 minutes to complete each report and 60 minutes to complete recordkeeping requirements.

QUESTIONS REGARDING THE PROPOSED DATABASE

FinCEN welcomes all comments with regard to the database proposal. FinCEN is specifically requesting comment on the following:

Eric Richard • General Counsel • (202) 508-6742 • erichard@cuna.com
Mary Mitchell Dunn • SVP & Deputy General Counsel • (202) 508-6736 • mdunn@cuna.com
Luke Martone • Senior Regulatory Counsel • (202) 508-6743 • lmartone@cuna.com