06-5492. Office of Thrift Supervision

AGENCIES:

Financial Crimes Enforcement Network, Department of the Treasury (FinCEN); Office of the Comptroller of the Currency, Department of the Treasury (OCC); Office of Thrift Supervision, Department of the Treasury (OTS); Federal Deposit Insurance Corporation (FDIC); National Credit Union Administration (NCUA).

ACTION:

Submission for OMB review; joint comment request.

SUMMARY:

In accordance with the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), FinCEN, OCC, OTS, FDIC, and NCUA (collectively, the “agencies”) hereby give notice that they have submitted to the Office of Management and Budget (OMB) requests for review of the information collections described below.

OCC, OTS, FDIC, NCUA, and FinCEN are submitting the Suspicious Activity Report (SAR) information collection to OMB for extension with revision. The Board of Governors of the Federal Reserve System (the Board) also participated in this review. However, the Board, under its Paperwork Reduction Act (PRA) delegated authority, will publish a separate final notice and submit its SAR information collection to OMB.

On February 17, 2006, the agencies and the Board, requested public comment on a major revision of the SAR form. OCC also requested comments on all information collections contained in 12 CFR part 21 (“Minimum Security Devices and Procedures, Reports of Suspicious Activities, and Bank Secrecy Act Compliance Program”). The agencies have made the proposed changes, as well as additional changes suggested by the commenters.

DATES:

Written comments should be received on or before July 19, 2006.

ADDRESSES:

Interested parties are invited to submit written comments to any or all of the agencies. All comments, which should refer to the associated OMB control numbers, will be shared among the agencies. Direct all written comments as follows:

Financial Crimes Enforcement Network: Financial Crimes Enforcement Network, P.O. Box 39, Vienna, VA 22183, Attention: 1506-0001, Revised Suspicious Activity Report by Depository Institutions. Comments also may be submitted by electronic mail to the following Internet address: [e-mail] with the caption in the body of the text, “Attention: 1506-0001, Revised Suspicious Activity Report by Depository Institutions”.

Comptroller of the Currency: Communications Division, Office of the Comptroller of the Currency, Public Information Room, Mailstop 1-5, Attention: 1557-0180, 250 E Street, SW., Washington, DC 20219. In addition, comments may be sent by fax to [phone], or by electronic mail to [e-mail]. You can inspect and photocopy the comments at the OCC's Public Information Room, 250 E Street, SW., Washington, DC 20219. You can make an appointment to inspect the comments by calling [phone].

Additionally, you should send a copy of your comments to OCC Desk Officer, 1557-0180, by mail to U.S. Office of Management and Budget, 725 17th Street, NW., #10235, Washington, DC 20503, or by fax to [phone].

Office of Thrift Supervision: Send comments, referring to the collection by title of the proposal or by OMB control number, to OMB and OTS at these addresses: Office of Information and Regulatory Affairs, Attention: Desk Officer for OTS, U.S. Office of Management and Budget, 725 17th Street, NW., Room 10235, Washington, DC 20503, or by fax to [phone]; and Information Collection Comments, Chief Counsel's Office, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552; send a fax to [phone]; or send an e-mail to [e-mail]. The Office of Thrift Supervision will post comments and the related index on its Internet site at http://www.ots.treas.gov. In addition, interested persons may inspect comments at the Public Reading Room, 1700 G Street, NW., by appointment. To make an appointment, call [phone], send an e-mail to [e-mail], or send a fax to [phone].

Federal Deposit Insurance Corporation: Written comments should be addressed to Steve Hanft, Clearance Officer, Legal Division MB-3064, Federal Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC 20429. Fax No.: [phone]. E-mail: [e-mail].

National Credit Union Administration: Clearance Officer: Mr. Neil M. McNamara, [phone], National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314-3428, Fax No.: [phone], E-mail: [e-mail].

OMB: Alexander T. Hunt, [phone], Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT:

You may request additional information or a copy of the collection by contacting:

FinCEN: Regulatory Policy and Programs Division at [phone].

OCC: You can request additional information or a copy of the collection from Mary Gottlieb, OCC Clearance Officer, or Camille Dickerson, [phone], Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, 250 E Street, SW., Washington, DC 20219.

OTS: Marilyn K. Burton, OTS Clearance Officer, at [e-mail], [phone], or facsimile number [phone], Litigation Division, Chief Counsel's Office, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.

Federal Deposit Insurance Corporation: Steve Hanft, Legal Division MB-3064, Federal Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC 20429, [phone].

National Credit Union Administration: Tracy Sumpter, Office of the Chief Information Officer, [phone], or John K. Ianno, Office of General Counsel, [phone].

SUPPLEMENTARY INFORMATION:

Title: Suspicious Activity Report. (The OCC is renewing all information collections covered under the information collection titled: “(MA)—Minimum Security Devices and Procedures, Reports of Suspicious Activities, and Bank Secrecy Act Compliance Program (12 CFR 21).”)

OMB Numbers:

FinCEN: 1506-0001

OCC: 1557-0180

OTS: 1550-0003

FDIC: 3064-0077

NCUA: 3133-0094

Form Numbers:

FinCEN: Form 111

OCC: 8010-1/8010-9

OTS: 1601

FDIC: 6710/06

NCUA: 2362

Abstract: In 1985, the agencies issued procedures to be used by banks, thrifts, credit unions, their holding companies, and certain other depository institutions operating in the United States to report known or suspected criminal activities to the appropriate law enforcement agencies and the agencies themselves. Beginning in 1994, the agencies completely redesigned the reporting process. This redesign resulted in the existing Suspicious Activity Report, which became effective in April 1996.^[1]

Comments Received: On February 17, 2006, FinCEN and the banking regulators published a joint Federal Register notice (71 FR 8640) seeking comment on proposed revisions to the existing SAR. The proposed revisions to the form and instructions were published in the notice. All comments received in response to the notice were carefully considered. Those comments that the agencies believe will further improve the form are included in the package that the agencies have submitted to OMB for approval, as discussed below. The agencies are publishing the second Federal Register notice regarding the new Suspicious Activity Report by Depository Institutions (SAR-DI), as required by the PRA. This second notice advises the public that the agencies have submitted the proposed revisions to OMB for approval, discusses the comments received, explains agency responses to the comments, and requests additional comment.

Current Actions: The proposed revisions standardize the new SAR-DI with the other SAR forms. The revisions were detailed in the first Federal Register notice, a copy of which is posted on the FinCEN Web site at http://www.fincen.gov/​71_​fr_​86401.pdf. These revisions and additions will improve the form's usefulness to law enforcement and to the agencies.

Comments Received and Agency Action Taken. The agencies received generally favorable comments from 23 commenters regarding the first notice. A majority of the commenters' suggestions involved policy issues rather than comments affecting the form's data collection elements. The following is a summary of the comments received:

1. Two commenters noted that law enforcement contact information had been moved to the narrative section.

Response: Noted. This change was made to simplify the form and was done with the approval of law enforcement agencies.

2. Several commenters noted that use of the special responses listed in the instructions were confusing and wondered if the data cells such as SSN would accept the entries.

Response: Noted. FinCEN confirms that all cells except “Total Amount” will accept alphanumeric entries. The instructions have been changed so that filers need enter only “XX” in critical fields when the information is unknown. A check box has been added to the “Total Amount” cell to allow the indication “unknown.”

3. Several commenters noted concern about removing the financial institution contact name from the form.

Response: Noted. This action was taken with the approval of the agencies and law enforcement as a measure to protect the filer if a SAR-DI was inadvertently disclosed.

4. Several commenters challenged the listed burden figure of one hour to complete the SAR-DI form.

Response: The one hour figure cited in the notice is the time required to complete the form and does not include the routine recordkeeping requirement. The burden has been adjusted to account for the recordkeeping.

5. Several commenters recommended that the reporting threshold limits be raised, time to file increased, and an exemption for filing on domestic cases be provided.

Response: The agencies, FinCEN and law enforcement believe that the reporting threshold limits and filing deadlines are appropriate as proposed in the first notice, and do not believe that there is a need for an exemption for filing on domestic cases.

6. Several commenters recommended adding various check boxes to the existing form. Cells for tax evasion, PEP (politically exposed person), MSB (money services business), and Non-Customer were requested.

Response: In each case the “Other” box may be checked and the appropriate entry made on the line provided. The agencies believe that this is sufficient.

7. One commenter suggested adding “or recurring” to box 1a.

Response: Accepted.

8. One commenter recommended moving the SAR-DI Part V instructions to another page.

Response: The agencies believe that moving the instructions in this way would add to the form's length unnecessarily.

9. One commenter suggested that the space for the narrative is too small and suggested re-numbering the instruction pages to “a”, “b”, “c”, etc.

Response: The form's instructions direct the filer to use a blank sheet of bond paper if more space is required. Re-numbering the form's instruction pages with letters would not follow the IRS Style Guide, which is the standard for BSA forms design.

10. One commenter questioned whether the government could use all of the information being collected on the SAR-DI.

Response: Noted.

11. Several commenters suggested that the “optional” tag be removed from the internal file or control number box.

Response: The items tag was changed to “If available'.

12. One commenter requested that reporting institutions be required to employ enhanced due diligence if more than one law enforcement contact was made about a single report.

Response: FinCEN currently notifies Law Enforcement through the Gateway system. Therefore, the requested enhanced due diligence is not needed.

13. Two commenters requested that a cell for an e-mail address and a check box to indicate if the subject is an individual or an entity be added to Part I of the form.

Response: The addition of an e-mail address box is accepted. This change is now included among the proposed revisions to the form. The type of subject as an individual or entity should be apparent from the information in the subject box.

14. One commenter suggested that Part II, Item 23a be divided into two entries.

Response: The Federal Banking Agencies and FinCEN believe it is more appropriate for Law Enforcement or the Examiners to determine the specific activity.

15. Two commenters requested a check box to indicate if multiple SAR's on the subject had been filed.

Response: This information is already available from the database.

16. A commenter questioned the need to include non-depository institution regulators on the SAR-DI.

Response: Noted. This information is required if jointly filing a SAR with a non-depository institution.

17. One commenter suggested expanding the phone number cells to handle international numbers, modifying the DOB box, adding a reference to e-filing, and also suggested that the form have “free form” boxes.

Response: Since the instructions already address each of these suggestions, no further changes need to be proposed.

18. In view of the joint filing capability of the revised SAR-DI, one commenter suggested changing the name from Depository Institutions to Financial Institutions, and requested that “amended, corrected, or updated report” be defined. It was also suggested that the type of phone, i.e., cell, blackberry, etc., be indicated.

Response: This is the SAR for Depository Institutions and a name change would be inconsistent with this group of filers. The instructions have been edited to define the terms. The type of phone is not considered necessary.

19. Several commenters were concerned about the effective dates for the revised form. It was also suggested that an e-file “beta” test site be used to insure functionality of the revised form.

Response: This notice identifies planned target dates for implementation. These dates will be adjusted as necessary to provide adequate planning lead-time. A “beta” e-filing test site is not available.

20. Several commenters requested joint filing guidance and voiced concern regarding information sharing.

Response: Guidance has been drafted and is currently under review. The agencies expect to issue guidance prior to the effective date of the form.

21. In response to a Treasury Inspector General finding, FinCEN and a commenter recommended that a “Date Discovered” field be added to the Suspicious Activity cell.

Response: After discussion, it was agreed that such a date should not be added to the report because it would be too subjective if more than one suspicious activity was selected.

22. One commenter recommended that Part V, the narrative, be restructured to provide specific examples of what information to include.

Response: The SAR narrative checklist and the SAR Activity Review, available on the FinCEN Web site, already provide sufficient guidance to the type of information recommended for inclusion in this part of the report.

23. One commenter commented on the proposed multiple changes to the SAR and voiced their support for each.

Response: Noted.

24. One commenter and three of the banking agencies suggested that Part III be reformatted to provide space to record “Holding Company” information if the SAR is filed at the Enterprise level. The commenter also suggested that the term “Branch Office” be renamed to “Office” as more inclusive and the term “necessarily” be removed from the statement covering repeat information.

Response: Accepted. Part III of the SAR-DI has been reformatted to permit the recording of holding company information while correctly listing the financial institution where the reported activity occurred and the instructions have been edited accordingly. To retain the joint filing format, the term “Branch Office” has been changed to “branch or office”. The term “necessarily” was deleted from the appropriate instruction.

25. One commenter suggested that the names of people who have questioned the subjects be included in the report. It was also suggested that the new internal control/file number is not needed. This commenter approved of excluding the disclosure statements in the narrative.

Response: SAR Part V Checklist line “e” covers the suggestion regarding subjects. In view of the removal of the filer's name, the internal control/file number is extremely important in determining which report is under discussion. The agencies therefore believe that this item should remain.

26. One commenter noted that moving the relationship of subject information from Part II to Part III posed a problem with reporting multiple subjects.

Response: Accepted. The instructions have been revised to correct the noted problem.

Special Instructions: The agencies are proposing an effective date of January 1, 2007, for all revisions to the Suspicious Activity Report (SAR) form and instructions that are approved by OMB. The SAR form included in this Federal Register notice is for training and system configuration use only. Do not use this form to report suspicious activity before January 1, 2007. Depository institutions may use the current SAR dated July 2003 until June 30, 2007. Depository institutions reporting possible terrorist-financed suspicious activity must file a SAR as indicated above, but should also contact FinCEN's Financial Institutions Hotline, [phone], to report the activity. Call FinCEN's Regulatory Helpline, [phone], after January 1, 2007, for individual copies of the form. Visit FinCEN's Internet site, http://www.fincen.gov, after January 1, 2007, for information about obtaining bulk copies of the form or to obtain a fill-in version.

Type of Review: Revision of a currently approved collection.

Affected Public: Business, for-profit institutions, and non-profit institutions.

Estimated Number of Respondents:

FinCEN: 27,262 ^[2]

OCC: 1,928

OTS: 862

FDIC: 5,200

NCUA: 9,300

Estimated Total Annual Responses:

FinCEN: 399,848

OCC: 250,184

OTS: 36,569

FDIC: 16,018

NCUA: 2,961

Estimated Total Annual Burden:

Note: The agencies have estimated 60 minutes for form completion. FinCEN assumes an additional 60 minutes for recordkeeping as required under 31 FR 103.18).

FinCEN: 799,696 hours ^[3]

OCC: 365,194 hours

OTS: 36,569 hours

FDIC: 16,018 hours

NCUA: 2,961 hours

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. A respondent must retain the supporting records to the SAR for five years. Generally, information collected pursuant to the Bank Secrecy Act is confidential, but may be shared as provided by law with regulatory and law enforcement authorities.

Request for Comments: Comments are invited on:

(a) Whether the collection of information is necessary for the proper performance of the functions of the agencies, including whether the information shall have practical utility;

(b) The accuracy of the agencies' estimate of the burden of the collection of information, including the validity of the methodology and assumptions used;

(c) Ways to enhance the quality, utility, and clarity of the information to be collected;

(d) Ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and

(e) Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.

Attachment: Suspicious Activity Report by Depository Institutions

Dated: June 12, 2006.

Donald Carbaugh,

Acting Associate Director, Regulatory Policy and Programs Division, Financial Crimes Enforcement Network.

Dated: June 2, 2006.

Stuart Feldstein,

Assistant Director, Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency.

Dated: June 13, 2006.

Deborah Dakin,

Senior Deputy Chief Counsel, Regulations and Legislation Division, Office of Thrift Supervision.

By Order of the Board of Directors.

Dated at Washington, DC, this 8th day of June, 2006.

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Executive Secretary.

By the National Credit Union Administration Board on June 6, 2006.

Mary Rupp,

Secretary of the Board.

Footnotes

1.  The report is authorized by the following rules: 31 CFR 103.18 (FinCEN); 12 CFR 21.11 (OCC); 12 CFR 563.180 (OTS); 12 CFR 353.3 (FDIC); 12 CFR 748.1 (NCUA). The rules were issued under the authority of 31 U.S.C. 5318(g) (FinCEN); 12 U.S.C. 93a, 1818, 1881-84, 3401-22, 31 U.S.C. 5318 (OCC); 12 U.S.C. 1463 and 1464 (OTS); 12 U.S.C. 93a, 1818, 1881-84, 3401-22 (FDIC); 12 U.S.C. 1766(a), 1789(a) (NCUA).

2.  Many respondents included in this estimate are also counted in the agencies' estimates.

3.  A respondent need only file one form. The estimated burden per form is 60 minutes; this estimate does not allocate time between or among agencies when copies of the form are filed to satisfy the rules of more than one agency.