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Financial Services Law Insights and Observations

Agencies proposes SAR filing exemptions

Agency Rule-Making & Guidance FDIC OCC SARs Financial Crimes FinCEN Bank Secrecy Act Anti-Money Laundering Of Interest to Non-US Persons

Agency Rule-Making & Guidance

On December 15, the FDIC issued a proposed rule (with accompanying Financial Institution Letter FIL-114-2020), which would amend the agency’s Suspicious Activity Report (SAR) regulation to permit additional, case-by-case, exemptions from SAR filing requirements. The proposed rule would allow the FDIC, in conjunction with the Financial Crimes Enforcement Network (FinCEN), to grant supervised institutions exemptions to SAR filing requirements when developing “innovative solutions to meet Bank Secrecy Act (BSA) requirements more efficiently and effectively.” The FDIC would seek FinCEN’s concurrence with an exemption when the exemption request involves the filing of a SAR for potential money laundering, violations of the BSA, or other unusual activity covered by FinCEN’s SAR regulation. The proposal allows the FDIC to grant the exemption for a specified time period and allows the FDIC to extend or revoke the exemption if circumstances change. The proposal is intended to reduce the regulatory burden on supervised financial institutions that are likely to leverage existing or future technologies to report suspicious activity in a different and innovative manner. Comments on the proposed rule must be submitted within 30 days of publication in the Federal Register.

The OCC also issued a proposal that would similarly allow the OCC to issue exemptions from SAR filing requirements to support national banks or federal savings associations developing innovative solutions intended to meet BSA requirements more efficiently and effectively.

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