LOGIN
DEMO

SAR Noncritical Fields: Still Important

Cherilyn Genovese, CAMS

Nov 15, 2017

Most people define critical as important: CRITICAL (krɪtɪkəl). adjective A critical time, factor, or situation is extremely important.
So doesn't noncritical mean not important? 
Not always! The assumption that a noncritical field is unimportant or can be skipped is a common misconception even among seasoned veterans in the industry.

Empty critical fields prevent submission of the SAR, and blanks in noncritical fields won’t inhibit filing but failing to provide adequate information in noncritical fields can trigger auditor and examiner criticism. 

The expectation is that all relevant information whether critical or noncritical is included in reporting. When FinCEN issues guidance, the industry understands that it’s expected, rather than a suggestion. If FinCEN didn’t want to know the information, they wouldn’t be asking for it. If the data is readily available, the expectation is that you’ll provide it.


Where Does It Say That?
The Federal Financial Institutions Examination Council (FFIEC) Bank Secrecy  Act/Anti-Money Laundering Infobase includes this explanation: “Certain fields in the BSAR are marked as "critical" for technical filing purposes. This means the BSA E-Filing System will not accept filings in which these fields are left blank.” 

FinCEN Suspicious Activity Report (SAR) FAQs clearly stress this point.

“for both critical and noncritical elements, financial institutions should complete those Items for which they have relevant information, regardless of whether or not the individual Items are deemed critical for technical filing purposes."

“For non-critical Items, FinCEN expects financial institutions will provide the most complete filing information available within each report consistent with existing regulatory expectations. Based upon feedback from law enforcement officials, such information is important for query purposes.”

 

So Why the Uptick in Criticism?
The answer is simple: sheer volume.

Let’s start by looking at the amount of data finding its way to FinCEN.  According to the latest data, year over year there’s been a steady increase in SAR filings by depository institutions. We’ve seen a 39% increase in filings from 2013 to the end of 2016. Based on trending activity depository institutions alone will crest a million SAR filings in 2017.

You can find more information by clicking this link: Section 2 - Depository Institution SARs: Section 2 - FinCEN Suspicious Activity Report (Form 111) & Exhibit 1: Filings by Year & Month by Depository Institutions* March 1, 2012 through December 31, 2016The statistics include Suspicious Activity Reports filed since March 1, 2012 on FinCEN Form 111 where the type of financial institution is depository institutions (i.e. banks, thrifts, savings and loans, and credit unions).

 

Month

2012

2013

2014

2015

2016

January

-

12,232

65,898

66,101

70,460

February

-

21,088

61,637

65,984

73,927

March

24

45,719

64,462

73,420

83,964

April

609

67,278

73,302

74,049

81,282

May

1,210

72,255

75,301

68,216

80,822

June

1,713

63,579

71,773

77,162

91,400

July

2,505

70,857

75,559

77,508

83,284

August

3,115

74,312

70,856

75,503

84,726

September

2,947

68,751

70,703

75,863

78,014

October

5,561

79,201

77,735

78,096

76,943

November

7,954

69,631

63,761

71,500

75,599

December

10,098

69,027

68,327

76,505

78,116

Subtotal

35,736

713,930

839,314

879,907

958,537

Total Filings

3,427,424

*Statistics generated for this report were based on the Bank Secrecy Act Identification Number of each record within the Suspicious Activity
Report system. The Bank Secrecy Act Identification Number is a unique number assigned to each Suspicious Activity Report submitted.
Numeric discrepancies between the total number 
filings and the combined 
number of filings of states and/or
territories are a result of multiple locations listed on 
one or more Suspicious Activity Reports.

 

What to Do with All That Data?
Data mining teaches us a few lessons. Data must align for ease of use, therefore it should stay within defined boundaries. Renegade data that falls outside established parameters makes analysis difficult and time-consuming. It’s imperative to populate the fields as directed by instructions so the data can be organized in ways that produce targeted information for swift investigations using sophisticated data mining tools.

 

What if my SAR Software Ignores (or doesn’t accurately complete) Noncritical Fields?
You’ll need to intercept and correct or a file a manual report (discrete filing). Communicate all gaps to your vendor. Enough calls and they will fix it!

"FinCEN expects financial institutions to have the capability to submit information for any of the data fields in the FinCEN SAR or CTR (or any other FinCEN report). In general, if your financial institution’s filing software does not permit the institution to include information in a field without an asterisk where information has been collected and is pertinent to the report, the financial institution should instead complete a discrete filing for those transactions until the software is updated. If a filing has been submitted in which such information was not included because of such a limitation in the filing software, an amended filing should be completed using either the discrete filing method or an amended batch filing, once the software is updated. Such software updates should be implemented within a reasonable period of time.”


Which Noncritical Focal Points are Commonly Criticized?
Here are a couple of examples of common areas that are completed incorrectly or not completed at all:

RSSD ID (Replication Server System Database ID)
The RSSD is a unique identifier assigned to financial institutions and some individual branches by the Federal Reserve. Many institutions are not in the practice of including their RSSD ID number in filings. 

When the field is completed properly, an investigator can quickly isolate and extract geographical data for a targeted regional investigation. The alternative is compiling a list of each financial institution in a state and determining each town where there’s a branch and then determining if they have had similar activity or individuals. Need I say more? By the time this data is compiled, too much time has passed to be effective in tracking down the bad guys. They’ve moved on to the next town. 


Not sure how to find this? This information is available through the National Information Center (NIC), a central repository of data about banks and other institutions. Be sure to click on the Branch Locator to determine the individual RSSD numbers for each of your branches.

 

Item 63 Loss to Financial Institution
Just imagine the number of SARs of the almost million filed by just depository institutions in 2016 with this field populated as $0.00, no loss to the financial institution (most common due to alert bankers) versus leaving it as a blank field.

The FinCEN SAR Electronic Filing Instructions state, “The amount entered in this field cannot be zero…” What’s the big deal; this is an accurate statement, we lost nothing.  

A computer recognizes this as a number and will populate a table of dollar amounts, which must be sorted to eliminate the zeros. If I’m an investigator and I want to quickly find cases of actual dollar losses occurring; I don’t want to weed out false/positive data.  

 

What Can You Do to Avoid Scrutiny?
Read the instructions! For electronic filings most are relying on hovering over data fields for instructions on how to complete SARs through E-filing. I recommend taking some time and reading through the help text for SAR filings, which includes details for accurate filings. You can access the FinCEN Suspicious Activity Report (FinCEN SAR) Electronic Filing Requirements, here.

In order to keep pace with the increased volume and the need for speed in investigations, it's imperative that each filer do their part to include all relevant data that may assist in isolating and investigating activity warranting further attention. Noncritical fields are equally important as critical fields to ensure swift investigations and to stave off criticism.

 

You can find some more resources below: 

 

Continuity’s RegAdvisor Pro solution can assist you in implementing a regulatory change system and RegControls™ includes pre-built compliance monitoring programs. Contact us at info@continuity.net if you'd like to learn more about how we can help!  

Topics: SAR, Noncritical Fields

Compliance Webinars
compliance-webinars-icon.png

View All Webinars