Associations Urge FinCEN to Reassess SAR Filing Burden Estimates
Commentary by Thomas Delaney
Several associations, representing "a broad universe of [suspicious activity report] filers of various sizes and business models," urged FinCEN to undertake a reassessment of the burden estimate for complying with SARs filing requirements.
In a comment letter, 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 ("the Associations") argued 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." The Associations expressed concern that FinCEN's proposal to renew–without change–the SARs reporting form (FinCEN Form 111) did not consider "any reassessment of the burden estimate since 2020."
The Associations argued that a more accurate estimate would "facilitate a more efficient use of the limited resources of both the government and SAR filers, and help financial institutions allocate the appropriate resources to adequately fulfil the regulatory requirement."
Commentary
While there are limited categories of SARs filings that can be made within FinCEN's current time estimates, financial institutions and regulatory officials know full well that preparing an accurate and appropriately comprehensive SAR filing, particularly when the underlying facts concern complex multi-party, and at times, multi-jurisdictional transactions, can be well in excess of 2 hours. The failure on the part of an institution to file a comprehensive SAR, deprives law enforcement of an important tool in combatting financial crime and can result in adverse supervisory consequences for the institution involved. Under these circumstances, FinCEN should seriously consider the Associations' request to develop a more accurate burden estimate for preparing SAR filings.