Jump to Content
ABA: The American Bankers Association
Skip Section Navigation

Can an examiner require a bank to file a Suspicious Activity Report (SAR)?

A regulator criticized my bank for not filing a Suspicious Activity Report (SAR) for a teller shortage. Even though the shortage was substantial, the bank’s investigation determined there was nothing suspicious about what happened. The examiner was not satisfied with our explanation of events and required us to file the SAR. Can the examiner do that? Is there anything we can do?

As a rule, examiners are not supposed to question the filing of an individual SAR. Instead, examiners are to consider the process for filing a SAR, which does entail testing the bank’s reports.

Under the Bank Secrecy Act (BSA), banks are required to file SARs in several circumstances, including insider abuse involving any amount. A teller is an insider. However, the determination of whether a transaction or occurrence is suspicious and requires the filing of a SAR is one that the bank should make.

This is clearly stated in the FFIEC Bank Secrecy Act Examination Manual (p. 68) that, “The decision to file a SAR is an inherently subjective judgment. Examiners should focus on whether the bank has an effective SAR decision-making process, not individual SAR decisions.”

The manual goes on to state that when a bank has an established SAR program with a process for monitoring, reporting, and decision-making, and where the bank has followed its own policies and procedures and decided not to file a SAR, “the bank should not be criticized for the failure to file a SAR unless the failure is significant or accompanied by evidence of bad faith.”

Therefore, unless the examiner has suggested that there is a significant failure or something that demonstrates bad faith on the part of the bank, the bank might want to discuss this further with the examiner-in-charge or possibly consider reaching out to the agency’s ombudsman. (December 2019)

Compliance Hotline

Have a compliance-related question? We're here to help. Members, reach us by phone or email.