TIP: This Compliance Courier was prepared by one of The League’s Compliance Specialists – Eileen Flugaur. She is a CUNA-certified Bank Secrecy Act Compliance Specialist (BSACS), as are all of our Specialists. To learn more about how the Compliance Specialist program could help your credit union, contact Paul Guttormsson.
Frequently, when The League’s Compliance Specialists review a credit union’s BSA program, we notice that some CTRs and SARs do not contain all the information required for proper completion. Certain fields in CTRs and SARs are marked as “critical” for technical filing purposes; this means the BSA E-Filing System does not accept filings in which these fields are left blank. But it appears that some credit unions mistakenly believe that as long as a form field is not marked with an asterisk, they don’t have to bother completing it – even if they have the relevant information.
The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) maintains a set of Frequently Asked Questions, and one of them addresses this issue:
What are the expectations for completing the items with an asterisk (critical) and without an asterisk (non-critical) found on the FinCEN CTR or any other FinCEN report?
As explained in FinCEN’s March 2012 guidance (FIN-2012-G002), for both critical and non-critical elements, financial institutions should complete those Items for which they have relevant information, regardless of whether or not the individual Items are deemed critical for technical filing purposes.
For critical Items, financial institutions must either provide the requested information or affirmatively check the “Unknown” (Unk.) box that is provided on the FinCEN CTR and FinCEN Suspicious Activity Report (SAR) (or any other FinCEN Report).
For non-critical Items, FinCEN expects financial institutions will provide the most complete filing information available within each report consistent with existing regulatory expectations. Based upon feedback from law enforcement officials, such information is important for query purposes. However, the new FinCEN SAR and FinCEN CTR do not create any new obligations to collect data, either manually or through an enterprise-wide IT management system, where such collection is not already required by current statutes and regulations, especially when such collection would be in conflict with the financial institution’s obligations under any other applicable law. Therefore, a financial institution may leave non-critical fields without an asterisk blank when information is not readily available.
So, credit unions should complete non-critical fields in SARs and CTRs if they have the necessary information.
A good example is the “occupation” field. Credit unions often leave it blank because it is a non-critical field. Or they populate it with a non-descriptive response such as “homemaker” or “retired.” If the credit union has obtained the member’s occupation during account opening and ongoing Customer Due Diligence (CDD) processes, that information should be included in the CTR and/or SAR, as explained in question 20 of FinCEN’s FAQs:
Is it acceptable to indicate such terms as “homemaker”, “retired”, or “unemployed” as descriptions for occupation?
When recording the occupation, profession, or type of business of the individual or entity listed in Part I, use specific descriptions such as “doctor,” “carpenter,” “attorney,” “used car dealership,” “plumber,” “truck driver,” “hardware store,” etc. Generally, do not use non-descriptive items such as “businessman,” “merchant,” “retailer,” “retired,” or “self-employed.” If words like “self-employed,” “unemployed,” “homemaker,” or “retired” must be used, however, add the current or former profession if known (e.g., “self-employed building contractor,” “retired teacher,” or “unemployed carpenter”). Financial institutions should pay particular attention to customers with non-specific occupations who continually make large cash deposits.
In other words, if a credit union has the information on its core system or on new account CDD forms, it should include the information in SAR and CTR filings, to paint a more complete and clearer picture of the subject and activity being reported.
Credit Unions should adopt the practice of completing as many fields as possible when filing a CTR or SAR, since FinCEN expects that financial institutions will provide the most complete filing information available.