FR2230_20160226_omb

OMB Supporting Statement for the
Suspicious Activity Report
(FR 2230; OMB No. 7100-0212)
Summary
The Board of Governors of the Federal Reserve System, under delegated authority from
the Office of Management and Budget (OMB), proposes to extend for three years, without
revision, the mandatory interagency Suspicious Activity Report (SAR) (FR 2230; OMB No.
7100-0212). As Bank Secrecy Act (BSA) administrator, the Department of Treasury’s Financial
Crimes Enforcement Network (FinCEN) transitioned in 2013 from industry specific paper forms
to one electronically-filed dynamic and interactive BSA-SAR used by all filing institutions.
There are no changes to the SAR regulatory reporting criteria. Institutions will continue to
follow Regulation H (12 C.F.R. 208.62), interagency guidance, and filing instructions to
determine when a report should be filed and what information should be included on the report.
On February 26, 2013, the Federal Reserve received certification for the new BSA-SAR.
The current total annual burden hours for all Federal Reserve supervised institutions is estimated
to be 159,071 hours.
Background and Justification
Since 1996, the federal banking agencies1 and FinCEN have required certain types of
financial institutions to report known or suspected violations of law and suspicious transactions.
To fulfill these requirements, supervised banking organizations file SARs.2 Law enforcement
agencies use the information submitted on the reporting form to initiate investigations and the
Federal Reserve uses the information in the examination and oversight of supervised institutions.
The Federal Reserve’s suspicious activity reporting rules apply to state member banks,
bank holding companies and their nonbank subsidiaries, Edge and agreement corporations, and
the U.S. branches and agencies, representative offices, and nonbank subsidiaries of foreign banks
supervised by the Federal Reserve. The Federal Reserve is only responsible for the paperwork
burden imposed on these institutions. Other federal banking agencies account for the paperwork
burden for the institutions they supervise.
The suspicious activity report filing requirement became effective on April 1, 1996.
Prior to the effective date, the Federal Reserve, the other federal banking agencies, and FinCEN
each issued new and nearly identical rules mandating the use of the interagency SAR for the
reporting of suspicious activities. In separate actions, FinCEN also enacted regulations requiring
other types of financial institutions, such as brokers or dealers in securities and futures; money
services businesses (money transmitters; issuers and sellers of money orders and travelers’

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The Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the
National Credit Union Administration.
2
In 1996, the Federal Reserve together with the other federal banking agencies issued nearly identical regulations to
implement the SAR process for banking organizations.

checks; check cashers, and dealers in foreign exchange); casinos and card clubs; and insurance
companies to file reports on suspicious activities.
In January 2003, check boxes were added to Part III of the SAR to note terrorist
financing and identity theft as suspicious activities and the safe harbor language in the
instructions was updated to reflect changes made by the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT)
Act of 2001.
Use of the electronic BSA-SAR became mandatory on April 1, 2013, and is available
form through FinCEN’s BSA E-Filing System.
Description of Information Collection
State member banks, bank holding companies and their nonbank subsidiaries, Edge and
agreement corporations, and the U.S. branches and agencies, representative offices, and nonbank
subsidiaries of foreign banks supervised by the Federal Reserve follow the SAR instructions to
determine when a SAR should be filed and what information should be included on the SAR.
Reporting Criteria
A banking institution must report certain known or suspected violations of federal law
and suspicious transactions. An institution is generally required to file a SAR with respect to:





suspicious activity of any amount involving an insider
violations aggregating $5,000 or more where a suspect can be identified
violations aggregating $25,000 or more regardless of a potential suspect
violations aggregating $5,000 or more that involve potential money laundering or
violations of the Bank Secrecy Act

An institution need not file a SAR for an attempted or committed burglary or robbery
reported to the appropriate law enforcement agencies.
Time Schedule for Information Collection
The SAR rules require that a SAR be filed no later than 30 calendar days from the date of
the initial detection of facts that may constitute a basis for filing a SAR. If no suspect can be
identified, the time period for filing a SAR is extended to 60 days. Respondents file online:
http://bsaefiling.fincen.treas.gov/main.html.
Legal Status
The Board’s Legal Division has determined the SAR is required by law pursuant to the
International Banking Act (12 U.S.C. §§ 248(a)(1), 3105(c)(2), 3106(a), and 625), the Bank
Holding Company Act (12 U.S.C. § 1844(c)), and the Federal Deposit Insurance Act (12 U.S.C.
1818(s)). The obligation to file a SAR is set forth in the Board’s rules and is mandatory for:

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

state member banks (12 C.F.R. 208.62(c)),



entities subject to the Bank Holding Company Act and their nonbank subsidiaries
(12 C.F.R. 225.4(f)),



Edge and agreement corporations (12 C.F.R. 211.5(k)), and



U.S. branches, agencies, and representative offices of foreign banks (12 C.F.R.
211.24(f)).

BSA-SARs are exempt from Freedom of Information Act (FOIA) disclosure by 31
U.S.C. 5319, which specifically provides that SARS “are exempt from disclosure under section
552 of title 5”, and FOIA exemption 3 (5 U.S.C. § 552(b)(3)) (matters “specifically exempted
from disclosure by statute”).
Consultation Outside the Agency
As set forth above, the SAR was originally developed in 1996 by an interagency group
that consisted of the federal banking agencies, the U.S. Departments of Justice and Treasury, and
several law enforcement agencies. The general framework of the BSA-SAR report and any
revisions to the BSA-SAR data elements would be discussed on an interagency basis. There are
currently no proposed revisions to the BSA-SAR data elements.
On October 22, 2015, the Federal Reserve published a notice in the Federal Register
(80 FR 64000) requesting public comment for 60 days on the extension, without revision, of this
information collection. The comment period for this notice expired on December 21, 2015. The
Federal Reserve did not receive any comments. On December 29, 2015, the Federal Reserve
published a final notice in the Federal Register (80 FR 81324).
Estimate of Respondent Burden
The burden per institution varies depending on the nature of the activity being reported.
Between January 1, 2014, and December 31, 2014, 5,489 state member banks, bank holding
companies, Edge and agreement corporations, and U.S. branches and agencies, representative
offices, and nonbank subsidiaries of foreign banks filed 106,0573 BSA-SARs. Based on this data
the annual reporting burden hours for all Federal Reserve regulated entities is estimated to be
159,071. The proposed burden represents approximately 1 percent of total Federal Reserve
System paperwork burden.

3

Number of BSA-SARs received by FinCEN between January 1, 2014, and December 31, 2014, which were
depository institutions regulated by the Federal Reserve.

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FR 2230
All Respondents

Estimated
Annual
average hours
frequency
per response

Number of
respondents4
5,489

19.32

1.5

Estimated
annual burden
hours
159,071

The total cost to the public is estimated to be $8,231,924.5
Sensitive Questions
This reporting form contains no questions of a sensitive nature, as defined by OMB
guidelines.
Estimate of Cost to the Federal Reserve System
The cost to the Federal Reserve System is negligible. The Federal Reserve, as well as the
other federal supervisors of financial institutions, distributes the reporting form in electronic
format. The Federal Reserve System has minimal data collection costs associated with SAR
filings, as the filings go directly to FinCEN which acts as the data base manager for the federal
banking agencies and makes the information available to the Federal Reserve electronically.

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Of the 5,489 respondents required to comply with this information collection, 637 of the respondents are
considered a small entity as defined by the Small Business Administration (i.e., entities with $550 million or less in
total assets) www.sba.gov/content/small-business-size-standards.
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Total cost to the public was estimated using the following formula: percent of staff time, multiplied by annual
burden hours, multiplied by hourly rates (30% Office & Administrative Support at $17, 45% Financial Managers at
$63, 15% Lawyers at $64, and 10% Chief Executives at $87). Hourly rates for each occupational group are the
(rounded) mean hourly wages from the Bureau of Labor and Statistics (BLS), Occupational Employment and Wages
May 2014, published March 25, 2015 http://www.bls.gov/news.release/ocwage.t01.htm. Occupations are defined
using the BLS Occupational Classification System, www.bls.gov/soc/.

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