Must I File a New SAR If I Observe a New Kind of Suspicious Activity?

Q If a bank files a suspicious activity report and, during its mandatory 90-day review, finds that the customer has stopped the original suspicious activity but uncovers other, new suspicious activity for the same customer, should the bank file a continuation SAR or does the bank file a new SAR?

A The bank should file a new SAR. The SAR instructions state: “A continuing report should be filed on suspicious activity that continues after an initial FinCEN SAR is filed.” (Emphasis added.)

The rule appears to contemplate repeated SAR filings for the same activity, but use of continuing reports rather than new reports for activity that is ongoing, meaning the subject of the initial SAR is engaging in the same type of previously reported activity. In your example, however, the initial SAR subject has discontinued the original suspicious activity and is now engaging in different suspicious activity. In this case, the bank should file an initial report within the normal SAR filing deadline of 30 days.

Since the customer is the same, however, it may be important to cross reference prior SARs filed for the same subject in the new SAR narrative to point out the same person was engaging in other types of suspicious activity. Referencing any prior SAR filing(s) assists law enforcement in connecting the dots. (Response provided June 2019.)

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Q I have a TILA-RESPA integrated disclosures question about the specificity of the list of settlement services on the written list of service providers that creditors must provide consumers if the creditor allows consumers to shop for certain services. My bank allows consumers to shop for most settlement services, including the settlement agent. Must the bank include on the written list of service providers every potential service for which a settlement agent may charge, such as notary and title search services, if the bank does not require these particular services?

A No. Under comment 3 to §1026.19(e)(1)(vi) of Regulation Z, “The settlement service providers identified on the written list . . . must correspond to the required settlement services for which the consumer may shop.” (Emphasis added.) To illustrate, Model Form H-27(B) offers a sample of the written list of providers. In the first column of the table is a list of potential settlement services. The third column identifies a corresponding “provider we identified.” If the bank does not require one of the services in the first column (for example, the lender’s title policy), it need not include the service or a corresponding provider on the written list.
The CFPB’s detailed summary of the 2017 changes addresses this issue in further detail.
(Response provided June 2019.)

Answers are provided by Leslie Callaway, CRCM, CAFP, director of compliance outreach and development; Mark Kruhm, CRCM, CAFP, senior compliance analyst; and Rhonda Castaneda, CRCM, senior compliance analyst, ABA Center for Regulatory Compliance. Answers do not provide, nor are they intended to substitute for, professional legal advice. Answers were current as of the response date shown at the end of each item.