[Federal Register Volume 61, Number 56 (Thursday, March 21, 1996)]
[Rules and Regulations]
[Pages 11525-11527]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-6702]
=======================================================================
-----------------------------------------------------------------------
[[Page 11526]]
NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 748
Suspicious Activity Report; Report of Catastrophic Act and Bank
Secrecy Act Compliance
AGENCY: National Credit Union Administration (NCUA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule changes existing references from ``Criminal
Referral Form'' to ``Suspicious Activity Report'' to conform the
language in the rule to the new Suspicious Activity Report (SAR) which
the financial regulatory agencies and the Department of the Treasury
have developed to replace the Criminal Referral Form (CRF). It also
reduces the required retention period for SARs' and any attachment
thereto from the current 10 years to 5 years. This final rule
streamlines reporting requirements by providing that credit unions file
a new SAR with NCUA and appropriate Federal law enforcement agencies by
sending the SARs to the Financial Crimes Enforcement Network of the
Department of the Treasury.
EFFECTIVE DATE: April 1, 1996.
ADDRESSES: National Credit Union Administration, 1775 Duke Street,
Alexandria, VA 22314-3428.
FOR FURTHER INFORMATION CONTACT: John K. Ianno or Jon Canerday, Office
of General Counsel, at the above address or telephone: (703) 518-6540.
SUPPLEMENTARY INFORMATION: An interagency Bank Fraud Working Group
(BFWG), consisting of representatives from many federal agencies,
including the federal financial institutions supervisory agencies (the
Agencies) \1\ and law enforcement agencies, was formed in 1984. The
BFWG addresses substantive issues, promotes cooperation among the
Agencies and federal and state law enforcement agencies, and improves
the federal government's response to white collar crime in financial
institutions. It is under the auspices of the BFWG that the revisions
to this regulation and the reporting requirements are being made.
\1\ The federal financial institutions supervisory agencies are
the Office of the Comptroller of the Currency, the Office of Thrift
Supervision, the Board of Governors of the Federal Reserve System,
the Federal Deposit Insurance Corporation, and the National Credit
Union Administration.
---------------------------------------------------------------------------
Suspicious Activity Report
The Agencies have been working on a project to improve the criminal
referral process, to reduce unnecessary reporting burdens on financial
institutions, and to eliminate confusion associated with the current
duplicative reporting of suspicious currency transactions in criminal
referral forms and currency transaction reports (CTRs).
Contemporaneously, Treasury analyzed the need to revise the procedures
used by financial institutions for reporting suspicious currency
transactions. As a result of these reviews, the Agencies and Treasury
approved the development of a new referral process that includes
suspicious currency transaction reporting.
To implement the reporting process, and to reduce unnecessary
burdens associated with these various reporting requirements, the
Agencies and the Department of the Treasury, through its Financial
Crimes Enforcement Network (FinCEN), developed a new form for reporting
known or suspected federal criminal law violations and suspicious
currency transactions. The new report is designated the Suspicious
Activity Report (SAR). The SAR is a simplified and shortened version of
its predecessors. The new referral process and the SAR reduce the
burden on credit unions for reporting known or suspected criminal
violations and suspicious currency transactions. The SAR increases the
reporting thresholds at which filing by credit unions becomes
mandatory. It also reduces from several to one the number of copies of
the form a credit union is required to file and eliminates the need to
file supporting documents with the form. Supporting documents must be
retained for five years instead of the ten years currently required.
These changes will reduce reporting burdens for credit unions.
Agencies anticipate that the new reporting system will be
operational April 1,1996. Once implemented, all referrals will be
housed in one central database. As with the CRF, complete instructions
for filing will continue to be on the SAR itself. The new referral
process will be detailed in a Letter to Credit Unions to be issued
contemporaneously with the new form. Until that time, credit unions
will continue to file reports in accordance with current requirements.
Rulemaking--5 U.S.C. 553
The NCUA finds that good cause exists to make this final rule
effective on April 1, 1996, less than 30 days after its publication
date. The rule implements technical changes to NCUA's existing rule
intended to conform its language to the adoption of the SAR, and
reduces the reporting and recordkeeping requirements of credit unions.
The adoption of this rule, effective April 1, 1996, will assure that
credit unions are able to comply with NCUA and Treasury reporting
requirements for suspicious activity by completing a single SAR and
filing it at one location.
Regulatory Flexibility Act
The Regulatory Flexibility Act requires the NCUA to prepare an
analysis to describe any significant economic impact any regulation may
have on a substantial number of small credit unions (primarily those
under $1 million in assets). The types of changes made by this rule
have no economic impact on credit unions. These are merely housekeeping
changes. Therefore, the NCUA Board has determined and certifies that,
under the authority granted in 5 U.S.C. 605(b), this final rule will
not have a significant economic impact on a substantial number of small
credit unions. Accordingly, the Board has determined that a Regulatory
Flexibility Analysis is not required.
Paperwork Reduction Act
This final rule makes technical changes to reflect the use of
Suspicious Activity Reports in place of Criminal Referral Forms and
shortens the records retention requirements for the form and related
documents. The Agencies and Treasury have submitted the SAR to OMB for
approval. The same amount of information will continue to be collected
under this rule although reporting will be simplified. The Rule does
not change any paperwork requirements.
Executive Order 12612
Executive Order 12612 requires NCUA to consider the effect of its
actions on state interests. This Rule applies to all federally insured
credit unions, simplifies the reporting process, and shortens the
document retention period from that contained in the present rule. The
NCUA Board has determined that this amendment is not likely to have any
direct effect on states, the relationship between states, or the
distribution of power and responsibilities among the various levels of
government because federally insured credit unions are currently
required to report crimes or suspected crimes which occur at their
offices.
List of Subjects in 12 CFR Part 748
Bank Secrecy Act, Credit unions, Crime, Currency, Reporting and
recordkeeping requirements, Security measures.
[[Page 11527]]
By the National Credit Union Administration Board on March 13,
1996.
Becky Baker,
Secretary of the Board.
Accordingly, NCUA amends 12 CFR chapter VII as follows:
PART 748--SUSPICIOUS ACTIVITY REPORT; REPORT OF CATASTROPHIC ACT
AND BANK SECRECY ACT COMPLIANCE
1. The heading of Part 748 is revised as set forth above.
2. The authority citation for Part 748 is revised to read as
follows:
Authority: 12 U.S.C. 1766(a), 1786(q); 31 U.S.C. 5311.
3. Section 748.1 (c) is revised to read as follows:
Sec. 748.1 Filing of reports.
* * * * *
(c) Suspicious Activity Report. (1) Each federally-insured credit
union will report any crime or suspected crime that occurs at its
office(s), utilizing NCUA Form 2362, Suspicious Activity Report (SAR),
within thirty calendar days after discovery. Each federally-insured
credit union must follow the instructions and reporting requirements
accompanying the SAR. Copies of the SAR may be obtained from the
appropriate NCUA Regional Office.
(2) Each federally-insured credit union shall maintain a copy of
any SAR that it files and the original of all attachments to the report
for a period of five years from the date of the report, unless the
credit union is informed in writing by the National Credit Union
Administration that the materials may be discarded sooner.
(3) Failure to file a SAR in accordance with the instructions
accompanying the report may subject the federally-insured credit union,
its officers, directors, agents or other institution-affiliated parties
to the assessment of civil money penalties or other administrative
actions.
(4) Filing of Suspicious Activity Reports will ensure that law
enforcement agencies and NCUA are promptly notified of actual or
suspected crimes. Information contained on SARs' will be entered into
an interagency database and will assist the federal government in
taking appropriate action.
[FR Doc. 96-6702 Filed 3-20-96; 8:45 am]
BILLING CODE 7535-01-P
