On 12/17/2020, the OCC issued a proposal to modify the requirements to file suspicious activity reports (SARs) for OCC regulated institutions (national banks and federal savings associations). To understand this proposed exemption, it is important to understand that OCC regulated institutions are generally subject to both OCC SAR rules as well as FinCEN SAR rules.
While neither the OCC’s SAR regulations nor FinCEN’s SAR reporting regulation contain provisions permitting exemptions, FinCEN has general authority to grant exemptions from the requirements of the BSA, which includes granting exemptions under its SAR reporting regulations. Specifically, FinCEN’s regulation provides that “[t]he Secretary [of Treasury], in his sole discretion, may by written order or authorization make exceptions to or grant exemptions from the requirements of [the BSA]. Such exceptions or exemptions may be conditional or unconditional, may apply to particular persons or to classes of persons, and may apply to transactions or classes of transactions.” The Secretary has delegated this exemption authority to FinCEN, but no such authority currently exists for the OCC, therefore making SAR relief somewhat impossible for OCC regulated institutions, regardless of FinCEN’s authority.
This proposed rule will provide the OCC the ability to grant exemptions from their SAR rules.
As the OCC’s SAR regulations have some requirements that go above and beyond the FinCEN SAR requirements, this exemptive authority could allow OCC regulated institutions relief in some areas without needing to also gain an exemption from FinCEN. For example, OCC rules that are more restrictive that FinCEN’s SAR rules include 1) the requirement to promptly notify the board of directors that a SAR has been filed as well as 2) a requirement to report in broader circumstances, such as reporting insider abuse at any dollar amount.
For exemption requests from the requirements of the OCC’s SAR regulations that would also require an exemption from FinCEN’s SAR regulation, for example, exemption requests related to SAR filings required by 12 CFR 21.11(c)(4), or related to SAR timing requirements in 12 CFR 21.11(d), or related to SAR confidentiality in 12 CFR 21.11(k), OCC regulated institutions would need to seek an exemption from both the OCC and FinCEN.
Comments must be received within 30 days after publication in the Federal Register.
The OCC’s proposed rule can be found here.