By PAUL O’DONOGHUE, Senior Correspondent
U.S. officials will overhaul SARs (Suspicious Activity Reports), simplifying the reports to cut down on banking red tape, according to Treasury fincrime chief John Hurley.
Mr Hurley, the Under Secretary for Terrorism and Financial Intelligence (TFI), said officials will reduce the complexity of filing the reports.
“The purpose of the BSA (Bank Secrecy Act) is to combat money laundering by requiring financial institutions to provide highly useful information to the government. SARs are the primary vehicles of that information,” he said during the ACAMS Assembly in Las Vegas.
“As everyone in this field knows, there are useful SARS and not so useful SARS. Regulatory pressure has led to more and more of the not so useful SARS.
“Complexity is also a major problem. The fact that instructions of completing a SAR are 170 pages long illustrates the challenge.
“Such complexity is not just a waste of your effort and resources. It also increases the likelihood of errors, making the underlying data less reliable.”
He added: “We’re actively working to address this, and hope to have news for you on it soon.”
Mr Hurley also said excessive SARs can lead to ‘debanking’.
This refers to when a financial institution declines to do business with a customer. The Trump administration has accused many banks of debanking conservatives.
Mr Hurley said current compliance rules lead to financial institutions often spending “significant amounts of time and money flooding the system” with low value alerts.
He said these often impact business which banks “know are legitimate”. “[It] is a foolish waste of time,” he said.
“Even worse, one leads the institution to make a business decision to debank these customers. It is both unfair and economically destructive,” he said.
Earlier this month the Office of the Comptroller of the Currency (OCC) rolled out new guidance to eliminate ‘debanking’.
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