[Federal Register Volume 65, Number 8 (Wednesday, January 12, 2000)]
[Notices]
[Pages 1895-1897]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-675]


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FEDERAL RESERVE SYSTEM


Agency Information Collection Activities: Announcement of Board 
Approval Under Delegated Authority and Submission to OMB

SUMMARY:

Background

    Notice is hereby given of the final approval of proposed 
information collection by the Board of Governors of the Federal Reserve 
System (Board) under OMB delegated authority, as per 5 CFR 1320.16 (OMB 
Regulations on Controlling Paperwork Burdens on the Public). Board-
approved collections of information are incorporated into the official 
OMB inventory of currently approved collections of information. Copies 
of the OMB 83-Is and supporting statements and approved collection of 
information instrument(s) are placed into OMB's public docket files. 
The Federal Reserve may not conduct or sponsor, and the respondent is 
not required to respond to, an information collection that has been 
extended, revised, or implemented on or after October 1, 1995, unless 
it displays a currently valid OMB control number.

FOR FURTHER INFORMATION CONTACT:

Chief, Financial Reports Section--Mary M. West--Division of Research 
and Statistics, Board of Governors of the Federal Reserve System, 
Washington, DC 20551 (202-452-3829)
OMB Desk Officer--Alexander T. Hunt--Office of Information and 
Regulatory Affairs, Office of Management and Budget, New Executive 
Office Building, Room 3208, Washington, DC 20503 (202-395-7860)

Final Approval Under OMB Delegated Authority of the Extension for 
Three Years, With Minor Revisions of the Following Report

    1. Report title: Suspicious Activity Report.
    Agency form number: FR 2230.
    OMB Control number: 7100-0212.
    Frequency: On occasion.
    Reporters: State member banks, Edge and agreement corporations, 
branches, agencies, and representative offices of foreign banks, and 
entities subject to the Bank Holding Company Act.
    Annual reporting hours: 7,000.
    Estimated average hours per response: 30 minutes .
    Number of respondents: 10,000.
    Small businesses are affected.
    General description of report: This information collection is 
mandatory: 12 CFR 208.20, state member banks; 12 CFR 211.8, Edge and 
agreement corporations; 12 CFR 211.24(f), branches, agencies, and 
representative offices of foreign banks; and 12 CFR 225.4(f), entities 
subject to the Bank Holding Company Act. The information collected on 
the Suspicious Activity Report (SAR) is confidential pursuant to 
exemption seven of the Freedom of Information Act (5 U.S.C. 552(b)(7)) 
and exemption two of the Privacy Act (5 U.S.C. 552a(k)(2)).
    Abstract: In 1985, the federal financial supervisory agencies and 
the Department of Treasury issued procedures to be used by banks, 
thrifts, credit unions, their holding companies and certain other 
financial institutions operating in the United States to report known 
or suspected criminal activities to the appropriate law enforcement 
agencies and the agencies. Beginning in 1994, the agencies completely 
redesigned the reporting process resulting in the existing Suspicious 
Activity Report, which became effective in April 1996.1
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    \1\ The report is authorized by the following rules: 31 CFR 
103.21 (FinCEN); 12 CFR 21.11 (OCC); 12 CFR 563.180 (OTS); 12 CFR 
208.20 (Board); 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. 324, 334, 611a, 1844(b) and (c), 
3015(c)(2) and 3106(a) (Board); 12 U.S.C. 93a, 1818, 1881-84, 3401-
22 (FDIC); 12 U.S.C. 1766(a), 1789(a) (NCUA).

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[[Page 1896]]

    Comments Received: On September 28, 1999, the agencies published a 
notice requesting public comment on the proposed revisions to the 
Suspicious Activity Report (64 FR 52363). The agencies received 17 
generally favorable comments regarding the proposal; five trade 
associations, three national banks, three credit unions, two foreign 
banks, two OCC employees, one state bank and one brokerage house and 
bank holding company. The following is a review of the comments 
received and the agencies' action taken in response to those comments.
    It should be noted that, the Federal Reserve has worked with the 
other federal financial supervisory agencies and FinCEN to review this 
information collection and the comments received. The other agencies 
will publish a separate joint Federal Register notice, and the Federal 
Reserve will process its extension under its Paperwork Reduction Act 
delegated authority.
    Current Actions: The agencies revised the SAR but did not make 
substantial additions to the content of the information collected. The 
revisions address a number of data collection, entry, and analysis 
problems encountered by filers and the end users of the information. In 
general, the revisions conform all date items to a four-digit year 
(Year 2000 change), make a number of other ministerial changes such as 
renumber items, clarify the form, improve its usefulness to law 
enforcement and the agencies, and adopt various commenters' 
suggestions.
    The agencies expanded the Zip Code blocks to provide room for a 
nine-digit Zip Code and dollar amount blocks to provide room for larger 
dollar values (and lines are added to these items to separate digits).
    A number of items on the current form were deleted or replaced. 
Questions regarding the asset size of the financial institution (item 
10 on the current form) and questions in the ``Witness Information'' 
(Part IV of the current form) and ``Preparer Information'' sections 
(Part V of the current form) were deleted. The information provided in 
the ``Contact Information'' section (Part VI of the current form) is 
all that will be required by the institutions and the contact person 
named in this section (new items) will be expected to provide witness 
and preparer information to the agencies and law enforcement 
investigators. The question (current item 43) asking for the address of 
the law enforcement agency contacted was deleted and replaced by 
questions (new items 41-44) asking for the name and telephone number of 
the person contacted in the law enforcement agency.
    The agencies clarified several items on the form. Question 1 was 
streamlined by eliminating the check-boxes for ``Initial Report'' and 
``Supplemental Report.'' If the report is an initial report or a 
supplemental report, the filer should leave question 1 blank. However, 
if the submission is correcting an error previously reported, the 
respondent should mark the box indicating ``Amends Prior Report'' and 
should fill out only the information as directed. Question 31 was 
clarified by adding a box that asks, initially, whether the 
relationship is an insider relationship. A check-box was added to the 
heading of Part II ``Suspect Information'' for use if suspect 
information is unavailable. In Part III, ``Suspicious Activity 
Information,'' the question asking whether a law enforcement agency has 
been contacted was reformatted to provide a list of law enforcement 
agencies (new item 40) with check-boxes to indicating the specific law 
enforcement agency contacted instead of requiring the respondent to 
writing the name of the agency (current item 42). The instruction 
regarding the type of instrument involved (current Part VII, 
instruction k) was clarified by adding examples of the types of 
instruments (new Part V).
    Current question 37 was revised to include a new box for ``Computer 
Intrusion'' and numbered question 35 on the new form. Previously, 
respondents reported computer intrusions by either checking the 
``Other'' box and specifying the type of activity in the space provided 
or by providing the information on the summary page. Additionally, the 
instructions were expanded to provide guidance regarding the 
circumstances constituting computer intrusion.
    Comments Received and Agency Action Taken. The commenters raised 
various issues, some of which will need further agency monitoring and 
consideration, and others which can be resolved by fine-tuning the SAR. 
The comments, sorted by subject, and the agencies' responses follow.

I. Further Agency Monitoring and Consideration

    Commenters suggested five areas of change that will require further 
agency monitoring and consideration.
    (1) Incorrect SARs. One commenter suggested that FinCEN should 
return any SAR that were incorrectly completed to the filing 
institution so that the SAR can be corrected and re-submitted.
    The agencies agree with the commenter's concerns and believe that 
accurate and complete SAR filings are important to an effective 
program. The SAR data base manager is in the processing of developing 
an error resolution process for the system. However, the primary 
responsibility for accurately completing and reviewing a SAR lies with 
the management and staff of the institution. If an institution 
determines that it has filed an inaccurate or incomplete SAR, it should 
file an amended report in a timely manner.
    (2) Electronic Filing. Two commenters indicated that it would be 
beneficial to allow for institutions to file the SAR electronically.
    The agencies agree that the ability to file electronically would be 
beneficial and are working towards that goal, keeping in mind the 
security and confidentiality issues associated with such filings.

II. SAR Changes

    The 17 commenters made several suggestions regarding revisions to 
the SAR itself. Those suggestions and the agencies' responses to those 
suggestions follow.
    (1) Initial/supplemental/amended Reports. The SAR should explain 
the box for supplemental reports.
    In order to streamline the form, the agencies are removing the 
check-boxes for ``Initial Report'' and ``Supplemental Report.'' 
Instead, a box for amended reports is added for use only if the filer 
is correcting a prior report.
    (2) Primary Regulator. Current item 3, ``Primary Federal 
Regulator'' should be modified to include the SEC.
    The agencies believe that it is unnecessary to add the SEC to this 
field because the form is designed for use by the agencies and by the 
financial institutions that the agencies supervise.
    (3) Location of Branch Where Activity Occurred. Question 9 of the 
current SAR should be clarified to indicate which branch or subsidiary 
of a foreign bank should file the SAR and which primary regulator 
should be identified.
    The agencies believe that the branch where the suspicious activity 
occurred should be the branch that is identified in Part I, ``Reporting 
Financial Institution Information.'' In addition, the SAR should 
identify as the Primary Federal Regulator the agency that supervises 
the branch or subsidiary where the suspicious activity occurred.

[[Page 1897]]

    (4) Multiple Branches. Question 9 of the SAR should be corrected 
with regard to the instructions for listing multiple branches because 
there are no such instructions given. In addition, the form should 
provide for an entry which indicates, when appropriate, that no branch 
was involved.
    The agencies agree with the first of these two comments and are 
striking the phrase ``(see instructions)'' in item 9 of the proposed 
form. The agencies will place the directions for listing multiple 
branches on the form. With regard to the second comment, the agencies 
note that if no branch is involved, the filer can leave that part of 
the form blank.
    (5) Multiple Suspects. There should be a way for an institution to 
enter multiple suspects without preparing a duplicate page 1 which asks 
for institution-related information as well as suspect-related 
information.
    The institution, in filling out multiple pages for additional 
suspect information, can simply leave the bank-related information on 
the multiple pages blank since it was already provided on page 1.
    (6) Forms of Identification. In item 28 ``Forms of Identification 
for Suspect'' of the proposed form, 28(e) ``number'' and (f) ``issuing 
authority'' should be deleted and the information requested should be 
incorporated within 28(a)-(d).
    The agencies agree with this suggestion and are modifying this item 
so that the identifying number and issuing authority is listed next to 
each form of identification listed in new 29(a)-(d).
    (7) Types of Suspects. The agencies should add ``Monetary 
Instrument Purchaser'' and ``Account Applicant'' to the list of types 
of suspects and their relationship to the institution in item 31 of the 
form currently in use.
    The agencies believe that an institution can indicate ``Customer'' 
in these situations--even though in some instances the individual may 
be turned away as an actual customer--or the bank can use the ``Other'' 
category.
    (8) No Relationship to Institution. There should be a box within 
current item 31 ``Relationship to Financial Institution'' for the filer 
to indicate that the suspect has no relationship with the institution.
    The agencies believe that this is unnecessary since the filer can 
either leave this section blank or can use the ``Other'' line to 
indicate the nature of the suspect.
    (9) Confession. Item 34 of the form currently in use and item 32 of 
the proposed form should be moved so that it is not juxtaposed to 
insider related information and thus confusing as to whether it applies 
only to insiders.
    The agencies wish to collect information concerning a confession 
with regard to all suspects. Consequently, to clarify this, the 
agencies will physically move this item (new item 28) on the form so 
that it is separate from the insider relationship information.
    (10) Range of Dates. The form should provide for the ability of the 
filer to put down a range of dates over which the suspicious activity 
occurred rather than just one date.
    The proposed, in item 33, ``Date or date range of suspicious 
activity'' provides for the filer to be able to submit a range of 
dates.
    (11) Computer Intrusion. The agencies should more clearly define 
``computer intrusion'' and should include specific examples in new item 
35 of what would and would not be covered.
    The agencies believe that the current definition is appropriate.
    (12) Identity Theft. There should be an additional box under 
current item 37, ``Summary characterization of suspicious activity,'' 
to include ``identity theft'' as a specific category.
    The agencies agree that identity theft is an important category of 
criminal activity. However, identity theft is frequently linked with 
other crimes that are specifically enumerated on the SAR, such as check 
fraud and credit card fraud. In addition, there are already 18 specific 
boxes under this category and institutions can use the ``Other'' box to 
report identity theft. Therefore, the agencies have decided, at this 
time, not to revise the SAR to include ``identity theft'' as a new 
category and expect that institutions will continue to use the 
``Other'' box, or use other appropriate boxes. The agencies will 
continue to monitor this area and will reconsider this decision if 
warranted.
    (13) Contacting Law Enforcement. New item 40 should contain a 
``Yes/No'' check-box allowing respondents to indicate whether or not 
the respondent has contacted a law enforcement agency.
    The agencies believe that such a change is unnecessary since 
answering this item or leaving it blank will indicate whether or not 
the respondent has contacted a law enforcement agency. Further, the 
agencies wish to eliminate as many entries on the form as possible.
    (14) Witness Information. The agencies should either delete Part IV 
``Witness Information'', or they should delete the requirement for a 
social security number of the witness. This requirement is unnecessary 
and potentially invasive of the individual's privacy.
    The agencies agree and have deleted current Part IV altogether. The 
agencies, however, expect that the ``Institution Contact,'' named in 
Part VI of the current form, will maintain or have access to all 
pertinent documentation and witness information for the agencies and 
law enforcement.
    (15) Preparer Information. The agencies should retain current Part 
V, ``Preparer Information'' section so that the ``Institution Contact'' 
can readily determine who prepared the form and where to locate the 
necessary underlying information.
    The agencies believe that the ``Institution Contact'' should be 
able to maintain this information without the assistance of the form. 
In addition, as noted above, the agencies wish to eliminate as many 
entries on the form as possible.
    (16) Instructions on the Narrative Explanation. The agencies should 
highlight the instructions in current Part VII, ``Suspicious Activity 
Information Explanation/Description'' pertaining to the narrative 
explanation, by moving the instruction ``If necessary, continue the 
narrative on a duplicate of this page,'' to the bottom of the page and 
putting it in bold type.
    In order to highlight this instruction, the agencies will put it in 
bold type, but will leave it at the top of the page.
    (17) Instructions on the Narrative Explanation. The agencies should 
delete many of the instructions in current Part VII because they do not 
pertain strictly to the requirement for a narrative explanation.
    The agencies believe that it is appropriate to retain all the 
existing instructions from part VII of the current form.

    Board of Governors of the Federal Reserve System, January 6, 
2000.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 00-675 Filed 1-11-00; 8:45 am]
BILLING CODE 6210-01-P