[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