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On September 2, FinCEN, the FDIC, Federal Reserve, NCUA, and OCC issued a joint statement clarifying how Suspicious Activity Report (SAR) confidentiality requirements apply when banks and credit unions communicate with customers about potentially fraudulent or suspicious transactions and account closures. The statement does not change existing Bank Secrecy Act (BSA) requirements or establish new supervisory expectations.
Although the BSA prohibits disclosure of a SAR or information that would reveal the existence of a SAR, the agencies emphasized that the prohibition does not extend to the underlying facts, transactions, and documents on which a SAR is based. According to the statement, banks and credit unions may, without violating SAR confidentiality requirements:
- Discuss suspicious transactions. Institutions may discuss transaction dates, amounts, parties, and other underlying facts, provided the communication does not reveal the existence of a SAR.
- Explain account restrictions or closures. Institutions may tell customers that an account delay, limitation, restriction, or closure relates to suspected fraud or other suspicious activity.
- Request additional information. Institutions may ask about the purpose of transactions, sources of funds, customer relationships, or originators and beneficiaries of funds transfers.
- Provide fraud-related information. Institutions may warn customers about fraud schemes and explain available mitigation or remediation measures.
The agencies emphasized that communications should be evaluated case-by-case and that institutions should continue taking precautions to prevent disclosure of information that would reveal the existence of a SAR.
Putting It Into Practice: The statement provides banks and credit unions additional clarity when balancing SAR confidentiality requirements with customer communications during fraud investigations and account closures. It also fits within the federal banking agencies’ broader focus on fair access to financial services (previously discussed here). Banks and credit unions should review customer-facing fraud and account-closure procedures to ensure personnel understand both what information may be communicated and what information remains protected by SAR confidentiality requirements.
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