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> SARs[1] Link? I found https://en.wikipedia.org/wiki/Suspicious_activity_report https://en.wikipedia.org/wiki/Suspicious_activity_report but this describes a

> SARs[1] Link? I found https://en.wikipedia.org/wiki/Suspicious_activity_report https://en.wikipedia.org/wiki/Suspicious_activity_report but this describes a process where a bank makes a report to the feds, not a process where the feds make a report to the bank. And account closure is not mentioned.

woodruffw 5y ago
The federal government does not make a report to the bank. They mandate that the bank makes reports on any currency transaction over $10,000 USD, including special activity reports when the transaction is flagged for other reasons. The liability associated with maintaining a bank account after submitting an SAR is high, which is why banks immediately freeze those accounts.
- greyface- 5y ago
  > The liability associated with maintaining a bank account after submitting an SAR is high, which is why banks immediately freeze those accounts. Again, do you have a source on this? It would seem to be at odds with the requirement that a bank keeps the filing of SARs secret from the accountholder. Skimming the BSA, there seem to be a lot of liability carveouts for banks that file SARs. I can't find anything that would increase bank liability in a situation where a SAR is filed.
  - woodruffw 5y ago
    > It would seem to be at odds with the requirement that a bank keeps the filing of SARs secret from the accountholder. If you have a SAR filed against your account, your bank will not tell you. They'll tell you that they've closed your account for internal policy or compliance reasons. And they won't be lying: the BSA doesn't require them to close the account. The liabilities in question are both regulatory and financial. On the regulatory side: bank employees are instructed never to tell a customer about the presence of a SAR, but mistakes can happen (and thus open the bank up to regulatory scrutiny or punishment). Similarly, the FDIC and Fed track SAR patterns, and may increase their scrutiny of a bank if customers who have historically received SARs at other banks successfully maintain accounts with a different bank. On the financial side: SARs are filed for all kinds of crimes, including crimes against financial institutions themselves. It's a financial risk to keep those accounts around, because their rotating value might not reflect their actual "ultimate" settled value. As for sources: here is a FAQ on SARs from the NCUA[1]. I don't have a pre-existing source for banks immediately closing accounts on SARs. Here's one I randomly found that states that a little over 1/4th of all SARs lead to account closure[2]. [1]: https://www.ncua.gov/newsroom/press-release/2021/ncua-federal-banking-agencies-fincen-issue-faqs-sar-and-other-aml-requirements/answers-faqs-regarding-suspicious-activity-reporting-and-other-anti-money https://www.ncua.gov/newsroom/press-release/2021/ncua-federa... [2]: https://bpi.com/the-truth-about-suspicious-activity-reports/ https://bpi.com/the-truth-about-suspicious-activity-reports/

woodruffw 5y ago

The federal government does not make a report to the bank. They mandate that the bank makes reports on any currency transaction over $10,000 USD, including special activity reports when the transaction is flagged for other reasons. The liability associated with maintaining a bank account after submitting an SAR is high, which is why banks immediately freeze those accounts.

greyface- 5y ago
> The liability associated with maintaining a bank account after submitting an SAR is high, which is why banks immediately freeze those accounts. Again, do you have a source on this? It would seem to be at odds with the requirement that a bank keeps the filing of SARs secret from the accountholder. Skimming the BSA, there seem to be a lot of liability carveouts for banks that file SARs. I can't find anything that would increase bank liability in a situation where a SAR is filed.
- woodruffw 5y ago
  > It would seem to be at odds with the requirement that a bank keeps the filing of SARs secret from the accountholder. If you have a SAR filed against your account, your bank will not tell you. They'll tell you that they've closed your account for internal policy or compliance reasons. And they won't be lying: the BSA doesn't require them to close the account. The liabilities in question are both regulatory and financial. On the regulatory side: bank employees are instructed never to tell a customer about the presence of a SAR, but mistakes can happen (and thus open the bank up to regulatory scrutiny or punishment). Similarly, the FDIC and Fed track SAR patterns, and may increase their scrutiny of a bank if customers who have historically received SARs at other banks successfully maintain accounts with a different bank. On the financial side: SARs are filed for all kinds of crimes, including crimes against financial institutions themselves. It's a financial risk to keep those accounts around, because their rotating value might not reflect their actual "ultimate" settled value. As for sources: here is a FAQ on SARs from the NCUA[1]. I don't have a pre-existing source for banks immediately closing accounts on SARs. Here's one I randomly found that states that a little over 1/4th of all SARs lead to account closure[2]. [1]: https://www.ncua.gov/newsroom/press-release/2021/ncua-federal-banking-agencies-fincen-issue-faqs-sar-and-other-aml-requirements/answers-faqs-regarding-suspicious-activity-reporting-and-other-anti-money https://www.ncua.gov/newsroom/press-release/2021/ncua-federa... [2]: https://bpi.com/the-truth-about-suspicious-activity-reports/ https://bpi.com/the-truth-about-suspicious-activity-reports/