SAR Filings - Known Criminal Activity (Texas State-Chartered CUs)
Friday, January 19, 2018 8:40 AM

The Department encourages credit unions to develop a relationship with local law enforcement, as these relationships are invaluable in the fight against financial crime for both the individual institution and the credit union industry as a whole. However, when law enforcement agencies respond to an incident in process, one which may even result in an arrest of the perpetrator, the credit union is not relieved of its responsibility to file a Suspicious Activity Report (SAR) with the Financial Crimes Enforcement Network (FinCEN) when the circumstances of the activity meet federal mandatory reporting requirements.

Federally-insured credit unions are required by Federal regulations to file a SAR with respect to:

  • Criminal violations involving insider abuse in any amount.
  • Criminal violations aggregating $5,000 or more when a suspect can be identified.
  • Criminal violations aggregating $25,000 or more regardless of a potential suspect.
  • Transactions conducted or attempted by, at, or through a financial institution or an affiliate and aggregating $5,000 or more, if the financial institution or affiliate knows, suspects, or has reason to suspect that the transaction:
    • May involve potential money laundering or other illegal activity (e.g., terrorism financing).
    • Is designed to evade the Bank Secrecy Act or its implementing regulations.
    • Has no business or apparent lawful purpose or is not the type of transaction that the particular customer would normally be expected to engage in, and the bank knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction.

The mandatory requirements listed above would include incidents that result in the arrest of the perpetrator. SAR filings in these instances are not only mandated, but aid law enforcement agencies in their efforts. FinCEN is a robust network and investigators use SAR data to identify patterns of criminal activity that lead to detection of other bad actors or larger criminal organizations.

Texas state-chartered credit unions are reminded of Rule 91.208 (Notice of Known or Suspected Criminal Violations), which requires a credit union to provide written notice to the Department within 30 calendar days for any of the following known or suspected criminal violations:

  1. Insider abuse involving any amount,
  2. Other transactions, including potential money laundering or violations of the Bank Secrecy Act, aggregating $5,000 or more,
  3. Losses resulting from robbery or burglary. When applicable, a credit union may meet the reporting requirements of this rule by providing the Department a copy of a Suspicious Activity Report prepared in accordance with NCUA Rules and Regulations 12 C.F.R. Section 748.1(c).

When applicable, a credit union may meet the reporting requirements of this rule by providing the Department a copy of a Suspicious Activity Report prepared in accordance with NCUA Rules and Regulations 12 C.F.R. Section 748.1(c).

Source:  Texas Credit Union Department