BPI Survey Finds FinCEN Significantly Underestimates SAR Filing Demands

BPI responds to FinCEN request under the Paperwork Reduction Act

Washington, D.C. - New survey data released today by the Bank Policy Institute finds that the Financial Crimes Enforcement Network significantly underestimates the time required for a bank to file a suspicious activity report. The survey, published as part of a submission to FinCEN, found that banks spend 21.41 hours for every SAR filed. These findings are more than 10 times the estimate - 1.98 hours - produced by FinCEN as part of its obligations under the Paperwork Reduction Act.

What we're saying:

Greg Baer, BPI President and CEO, stated:

"Today's findings show that SAR filings require significantly more resources than government estimates. While these resources might be manageable if the filings were effective, examiners at the federal banking agencies continue to push banks to investigate irrelevant matters, diverting time and resources from more effective methods of detecting and reporting illegal activity."

What is a SAR?

Banks are legally required to file SARs with FinCEN, a bureau of the U.S. Department of the Treasury, under the Bank Secrecy Act. SARs are not reflections of guilt or a legal judgment that a crime has taken place. Instead, they offer information to law enforcement and national security to help identify and prevent crime.

A study conducted by BPI found that banks filed more than 640,000 SARs in 2017; however, only about 4 percent of those SARs resulted in any follow-up from law enforcement. The Anti-Money Laundering Act of 2020 sought to enhance the efficiency and effectiveness of these efforts by encouraging innovation and promoting the adoption of technology. Many key aspects of AMLA have yet to be implemented by the U.S. government.

Who was surveyed?

The findings are based on survey data from fifteen BPI member banks, all with $100 billion or more in assets. Combined, these institutions are responsible for filing over 550,000 SARs in a year. The survey…

• Includes time dedicated to producing and reviewing a SAR, overseeing the process of filing a SAR and the actual filing of a SAR, not just the mechanical process of generating, submitting, and storing the SAR;
• Does not include any time dedicated to the basic design, development and maintenance of an institution's SAR program (e.g., policies, IT architecture, etc.);
• Pertains to anti-money laundering SARs rather than those exclusively related to fraud, which are typically handled by other business lines outside of firms' AML/BSA compliance groups; and
• Includes only SARs filed by institutions physically located within the United States.

To access a copy of the letter, please click here.

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About Bank Policy Institute.

The Bank Policy Institute (BPI) is a nonpartisan public policy, research and advocacy group, representing the nation's leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation's small business loans, and are an engine for financial innovation and economic growth.

Media Contact

Austin Anton
Bank Policy Institute
[email protected]