[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