FinCEN to Update Methodology for Calculating Regulatory Burden of SARs

Bank Secrecy Act reporting institutions annually spend roughly $206 million and 5.4 million hours of work investigating, evaluating cases and filing Suspicious Activity Reports, according to a new analysis from the Financial Crimes Enforcement Network. Of this, approximately 52% of the dollar cost and burden hours are borne by banks, with credit unions, money services businesses and other businesses accounting for the rest.

The figures were released in a standard Paperwork Reduction Act regulatory filing seeking comments on the renewal of the SAR form. As it is doing with the Currency Transaction Report form, FinCEN is re-analyzing how it calculates the burden imposed on financial institutions for filing the form, trying to capture the impact that technology has on submitting these reports. Previously, FinCEN based its assessment of the SAR regulatory burden on the functions associated with filling out the SAR form itself, but FinCEN noted that SAR filers spend a great deal of man-hours and money on monitoring systems, alert reviews, case reviews and documentation well before a decision is made to file a SAR. FinCEN proposed to incorporate time and money spent on case reviews, documentation and the SAR filing process, including recordkeeping on cases not converted to SARs, into the SAR burden estimate.

As part of the SAR renewal filing, FinCEN sought comments on its methodology, the reasonableness of its estimates and calculations and its segmentation of SAR filers. Comments are due by July 27.