Federal Deposit
Insurance Corporation

[Federal Register: June 19, 2006 (Volume 71, Number 117)]
[Notices]              
[Page 35325-35335]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19jn06-106]                        

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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

Office of Thrift Supervision

FEDERAL DEPOSIT INSURANCE CORPORATION

NATIONAL CREDIT UNION ADMINISTRATION
 
Agency Information Collection Activities; Submission for OMB Review; Comment Request; Suspicious Activity Report

AGENCIES: Financial Crimes Enforcement Network, Department of the Treasury (FinCEN); Office of the Comptroller of the Currency, Department of the Treasury (OCC); Office of Thrift Supervision,
Department of the Treasury (OTS); Federal Deposit Insurance Corporation (FDIC); National Credit Union Administration (NCUA).

ACTION: Submission for OMB review; joint comment request.

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SUMMARY: In accordance with the requirements of the Paperwork Reduction
Act of 1995 (44 U.S.C. chapter 35), FinCEN, OCC, OTS, FDIC, and NCUA
(collectively, the ``agencies'') hereby give notice that they have
submitted to the Office of Management and Budget (OMB) requests for
review of the information collections described below.
    OCC, OTS, FDIC, NCUA, and FinCEN are submitting the Suspicious
Activity Report (SAR) information collection to OMB for extension with
revision. The Board of Governors of the Federal Reserve System (the
Board) also participated in this review. However, the Board, under its
Paperwork Reduction Act (PRA) delegated authority, will publish a
separate final notice and submit its SAR information collection to OMB.
    On February 17, 2006, the agencies and the Board, requested public
comment on a major revision of the SAR form. OCC also requested
comments on all information collections contained in

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12 CFR part 21 (``Minimum Security Devices and Procedures, Reports of
Suspicious Activities, and Bank Secrecy Act Compliance Program''). The
agencies have made the proposed changes, as well as additional changes
suggested by the commenters.

DATES: Written comments should be received on or before July 19, 2006.

ADDRESSES: Interested parties are invited to submit written comments to
any or all of the agencies. All comments, which should refer to the
associated OMB control numbers, will be shared among the agencies.
Direct all written comments as follows:
    Financial Crimes Enforcement Network: Financial Crimes Enforcement
Network, P.O. Box 39, Vienna, VA 22183, Attention: 1506-0001, Revised
Suspicious Activity Report by Depository Institutions. Comments also
may be submitted by electronic mail to the following Internet address:
regcomments@fincen.gov with the caption in the body of the text,

``Attention: 1506-0001, Revised Suspicious Activity Report by
Depository Institutions''.
    Comptroller of the Currency: Communications Division, Office of the
Comptroller of the Currency, Public Information Room, Mailstop 1-5,
Attention: 1557-0180, 250 E Street, SW., Washington, DC 20219. In
addition, comments may be sent by fax to (202) 874-4448, or by
electronic mail to regs.comments@occ.treas.gov. You can inspect and
photocopy the comments at the OCC's Public Information Room, 250 E
Street, SW., Washington, DC 20219. You can make an appointment to
inspect the comments by calling (202) 874-5043.
    Additionally, you should send a copy of your comments to OCC Desk
Officer, 1557-0180, by mail to U.S. Office of Management and Budget,
725 17th Street, NW., 10235, Washington, DC 20503, or by fax
to (202) 395-6974.
    Office of Thrift Supervision: Send comments, referring to the
collection by title of the proposal or by OMB control number, to OMB
and OTS at these addresses: Office of Information and Regulatory
Affairs, Attention: Desk Officer for OTS, U.S. Office of Management and
Budget, 725 17th Street, NW., Room 10235, Washington, DC 20503, or by
fax to (202) 395-6974; and Information Collection Comments, Chief
Counsel's Office, Office of Thrift Supervision, 1700 G Street, NW.,
Washington, DC 20552; send a fax to (202) 906-6518; or send an e-mail
to infocollection.comments@ots.treas.gov. The Office of Thrift
Supervision will post comments and the related index on its Internet
site at http://www.ots.treas.gov. In addition, interested persons may

inspect comments at the Public Reading Room, 1700 G Street, NW., by
appointment. To make an appointment, call (202) 906-5922, send an e-
mail to public.info@ots.treas.gov, or send a fax to (202) 906-7755.
    Federal Deposit Insurance Corporation: Written comments should be
addressed to Steve Hanft, Clearance Officer, Legal Division MB-3064,
Federal Deposit Insurance Corporation, 550 17th Street, NW.,
Washington, DC 20429. Fax No.: (202) 898-3838. E-mail: shanft@fdic.gov.
    National Credit Union Administration: Clearance Officer: Mr. Neil
M. McNamara, (703) 518-6447, National Credit Union Administration, 1775
Duke Street, Alexandria, VA 22314-3428, Fax No.: (703) 518-6489, E-
mail: mcnamara@ncua.gov.
    OMB: Alexander T. Hunt, (202) 395-7316, Office of Information and
Regulatory Affairs, Office of Management and Budget, New Executive
Office Building, Room 10235, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: You may request additional information
or a copy of the collection by contacting:
    FinCEN: Regulatory Policy and Programs Division at (800) 949-2732.
    OCC: You can request additional information or a copy of the
collection from Mary Gottlieb, OCC Clearance Officer, or Camille
Dickerson, (202) 874-5090, Legislative and Regulatory Activities
Division, Office of the Comptroller of the Currency, 250 E Street, SW.,
Washington, DC 20219.
    OTS: Marilyn K. Burton, OTS Clearance Officer, at
marilyn.burton@ots.treas.gov, (202) 906-6467, or facsimile number (202)

906-6518, Litigation Division, Chief Counsel's Office, Office of Thrift
Supervision, 1700 G Street, NW., Washington, DC 20552.
    Federal Deposit Insurance Corporation: Steve Hanft, Legal Division
MB-3064, Federal Deposit Insurance Corporation, 550 17th Street, NW.,
Washington, DC 20429, (202) 898-3907.
    National Credit Union Administration: Tracy Sumpter, Office of the
Chief Information Officer, (703) 518-6444, or John K. Ianno, Office of
General Counsel, (703) 518-6540.

SUPPLEMENTARY INFORMATION:
    Title: Suspicious Activity Report. (The OCC is renewing all
information collections covered under the information collection
titled: ``(MA)--Minimum Security Devices and Procedures, Reports of
Suspicious Activities, and Bank Secrecy Act Compliance Program (12 CFR
21).'')
    OMB Numbers:

FinCEN: 1506-0001
OCC: 1557-0180
OTS: 1550-0003
FDIC: 3064-0077
NCUA: 3133-0094

    Form Numbers:

FinCEN: Form 111
OCC: 8010-1/8010-9
OTS: 1601
FDIC: 6710/06
NCUA: 2362

    Abstract: In 1985, the agencies issued procedures to be used by
banks, thrifts, credit unions, their holding companies, and certain
other depository institutions operating in the United States to report
known or suspected criminal activities to the appropriate law
enforcement agencies and the agencies themselves. Beginning in 1994,
the agencies completely redesigned the reporting process. This redesign
resulted in the existing Suspicious Activity Report, which became
effective in April 1996.\1\
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    \1\ The report is authorized by the following rules: 31 CFR
103.18 (FinCEN); 12 CFR 21.11 (OCC); 12 CFR 563.180 (OTS); 12 CFR
353.3 (FDIC); 12 CFR 748.1 (NCUA). The rules were issued under the
authority of 31 U.S.C. 5318(g) (FinCEN); 12 U.S.C. 93a, 1818, 1881-
84, 3401-22, 31 U.S.C. 5318 (OCC); 12 U.S.C. 1463 and 1464 (OTS); 12
U.S.C. 93a, 1818, 1881-84, 3401-22 (FDIC); 12 U.S.C. 1766(a),
1789(a) (NCUA).
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    Comments Received: On February 17, 2006, FinCEN and the banking
regulators published a joint Federal Register notice (71 FR 8640)
seeking comment on proposed revisions to the existing SAR. The proposed
revisions to the form and instructions were published in the notice.
All comments received in response to the notice were carefully
considered. Those comments that the agencies believe will further
improve the form are included in the package that the agencies have
submitted to OMB for approval, as discussed below. The agencies are
publishing the second Federal Register notice regarding the new
Suspicious Activity Report by Depository Institutions (SAR-DI), as
required by the PRA. This second notice advises the public that the
agencies have submitted the proposed revisions to OMB for approval,
discusses the comments received, explains agency responses to the
comments, and requests additional comment.
    Current Actions: The proposed revisions standardize the new SAR-DI
with the other SAR forms. The revisions were detailed in the first
Federal Register notice, a copy of which is posted on the FinCEN Web
site at http://www.fincen.gov/71_fr_86401.pdf.


[[Page 35327]]

These revisions and additions will improve the form's usefulness to law
enforcement and to the agencies.
    Comments Received and Agency Action Taken. The agencies received
generally favorable comments from 23 commenters regarding the first
notice. A majority of the commenters' suggestions involved policy
issues rather than comments affecting the form's data collection
elements. The following is a summary of the comments received:
    1. Two commenters noted that law enforcement contact information
had been moved to the narrative section.
    Response: Noted. This change was made to simplify the form and was
done with the approval of law enforcement agencies.
    2. Several commenters noted that use of the special responses
listed in the instructions were confusing and wondered if the data
cells such as SSN would accept the entries.
    Response: Noted. FinCEN confirms that all cells except ``Total
Amount'' will accept alphanumeric entries. The instructions have been
changed so that filers need enter only ``XX'' in critical fields when
the information is unknown. A check box has been added to the ``Total
Amount'' cell to allow the indication ``unknown.''
    3. Several commenters noted concern about removing the financial
institution contact name from the form.
    Response: Noted. This action was taken with the approval of the
agencies and law enforcement as a measure to protect the filer if a
SAR-DI was inadvertently disclosed.
    4. Several commenters challenged the listed burden figure of one
hour to complete the SAR-DI form.
    Response: The one hour figure cited in the notice is the time
required to complete the form and does not include the routine
recordkeeping requirement. The burden has been adjusted to account for
the recordkeeping.
    5. Several commenters recommended that the reporting threshold
limits be raised, time to file increased, and an exemption for filing
on domestic cases be provided.
    Response: The agencies, FinCEN and law enforcement believe that the
reporting threshold limits and filing deadlines are appropriate as
proposed in the first notice, and do not believe that there is a need
for an exemption for filing on domestic cases.
    6. Several commenters recommended adding various check boxes to the
existing form. Cells for tax evasion, PEP (politically exposed person),
MSB (money services business), and Non-Customer were requested.
    Response: In each case the ``Other'' box may be checked and the
appropriate entry made on the line provided. The agencies believe that
this is sufficient.
    7. One commenter suggested adding ``or recurring'' to box 1a.
    Response: Accepted.
    8. One commenter recommended moving the SAR-DI Part V instructions
to another page.
    Response: The agencies believe that moving the instructions in this
way would add to the form's length unnecessarily.
    9. One commenter suggested that the space for the narrative is too
small and suggested re-numbering the instruction pages to ``a'', ``b'',
``c'', etc.
    Response: The form's instructions direct the filer to use a blank
sheet of bond paper if more space is required. Re-numbering the form's
instruction pages with letters would not follow the IRS Style Guide,
which is the standard for BSA forms design.
    10. One commenter questioned whether the government could use all
of the information being collected on the SAR-DI.
    Response: Noted.
    11. Several commenters suggested that the ``optional'' tag be
removed from the internal file or control number box.
    Response: The items tag was changed to ``If available'.
    12. One commenter requested that reporting institutions be required
to employ enhanced due diligence if more than one law enforcement
contact was made about a single report.
    Response: FinCEN currently notifies Law Enforcement through the
Gateway system. Therefore, the requested enhanced due diligence is not
needed.
    13. Two commenters requested that a cell for an e-mail address and
a check box to indicate if the subject is an individual or an entity be
added to Part I of the form.
    Response: The addition of an e-mail address box is accepted. This
change is now included among the proposed revisions to the form. The
type of subject as an individual or entity should be apparent from the
information in the subject box.
    14. One commenter suggested that Part II, Item 23a be divided into
two entries.
    Response: The Federal Banking Agencies and FinCEN believe it is
more appropriate for Law Enforcement or the Examiners to determine the
specific activity.
    15. Two commenters requested a check box to indicate if multiple
SAR's on the subject had been filed.
    Response: This information is already available from the database.
    16. A commenter questioned the need to include non-depository
institution regulators on the SAR-DI.
    Response: Noted. This information is required if jointly filing a
SAR with a non-depository institution.
    17. One commenter suggested expanding the phone number cells to
handle international numbers, modifying the DOB box, adding a reference
to e-filing, and also suggested that the form have ``free form'' boxes.
    Response: Since the instructions already address each of these
suggestions, no further changes need to be proposed.
    18. In view of the joint filing capability of the revised SAR-DI,
one commenter suggested changing the name from Depository Institutions
to Financial Institutions, and requested that ``amended, corrected, or
updated report'' be defined. It was also suggested that the type of
phone, i.e., cell, blackberry, etc., be indicated.
    Response: This is the SAR for Depository Institutions and a name
change would be inconsistent with this group of filers. The
instructions have been edited to define the terms. The type of phone is
not considered necessary.
    19. Several commenters were concerned about the effective dates for
the revised form. It was also suggested that an e-file ``beta'' test
site be used to insure functionality of the revised form.
    Response: This notice identifies planned target dates for
implementation. These dates will be adjusted as necessary to provide
adequate planning lead-time. A ``beta'' e-filing test site is not
available.
    20. Several commenters requested joint filing guidance and voiced
concern regarding information sharing.
    Response: Guidance has been drafted and is currently under review.
The agencies expect to issue guidance prior to the effective date of
the form.
    21. In response to a Treasury Inspector General finding, FinCEN and
a commenter recommended that a ``Date Discovered'' field be added to
the Suspicious Activity cell.
    Response: After discussion, it was agreed that such a date should
not be added to the report because it would be too subjective if more
than one suspicious activity was selected.
    22. One commenter recommended that Part V, the narrative, be
restructured to provide specific examples of what information to
include.
    Response: The SAR narrative checklist and the SAR Activity Review,
available on the FinCEN Web site, already provide sufficient guidance
to

[[Page 35328]]

the type of information recommended for inclusion in this part of the
report.
    23. One commenter commented on the proposed multiple changes to the
SAR and voiced their support for each.
    Response: Noted.
    24. One commenter and three of the banking agencies suggested that
Part III be reformatted to provide space to record ``Holding Company''
information if the SAR is filed at the Enterprise level. The commenter
also suggested that the term ``Branch Office'' be renamed to ``Office''
as more inclusive and the term ``necessarily'' be removed from the
statement covering repeat information.
    Response: Accepted. Part III of the SAR-DI has been reformatted to
permit the recording of holding company information while correctly
listing the financial institution where the reported activity occurred
and the instructions have been edited accordingly. To retain the joint
filing format, the term ``Branch Office'' has been changed to ``branch
or office''. The term ``necessarily'' was deleted from the appropriate
instruction.
    25. One commenter suggested that the names of people who have
questioned the subjects be included in the report. It was also
suggested that the new internal control/file number is not needed. This
commenter approved of excluding the disclosure statements in the
narrative.
    Response: SAR Part V Checklist line ``e'' covers the suggestion
regarding subjects. In view of the removal of the filer's name, the
internal control/file number is extremely important in determining
which report is under discussion. The agencies therefore believe that
this item should remain.
    26. One commenter noted that moving the relationship of subject
information from Part II to Part III posed a problem with reporting
multiple subjects.
    Response: Accepted. The instructions have been revised to correct
the noted problem.
    Special Instructions: The agencies are proposing an effective date
of January 1, 2007, for all revisions to the Suspicious Activity Report
(SAR) form and instructions that are approved by OMB. The SAR form
included in this Federal Register notice is for training and system
configuration use only. Do not use this form to report suspicious
activity before January 1, 2007. Depository institutions may use the
current SAR dated July 2003 until June 30, 2007. Depository
institutions reporting possible terrorist-financed suspicious activity
must file a SAR as indicated above, but should also contact FinCEN's
Financial Institutions Hotline, (866) 556-3974, to report the activity.
Call FinCEN's Regulatory Helpline, (800) 949-2732, after January 1,
2007, for individual copies of the form. Visit FinCEN's Internet site,
http://www.fincen.gov, after January 1, 2007, for information about

obtaining bulk copies of the form or to obtain a fill-in version.
    Type of Review: Revision of a currently approved collection.
    Affected Public: Business, for-profit institutions, and non-profit
institutions.
    Estimated Number of Respondents:

FinCEN: 27,262 \2\
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    \2\ Many respondents included in this estimate are also counted
in the agencies' estimates.
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OCC: 1,928
OTS: 862
FDIC: 5,200
NCUA: 9,300

    Estimated Total Annual Responses:

FinCEN: 399,848
OCC: 250,184
OTS: 36,569
FDIC: 16,018
NCUA: 2,961

    Estimated Total Annual Burden:

    Note: The agencies have estimated 60 minutes for form
completion. FinCEN assumes an additional 60 minutes for
recordkeeping as required under 31 FR 103.18).

FinCEN: 799,696 hours \3\
OCC: 365,194 hours
OTS: 36,569 hours
FDIC: 16,018 hours
NCUA: 2,961 hours

    \3\ A respondent need only file one form. The estimated burden
per form is 60 minutes; this estimate does not allocate time between
or among agencies when copies of the form are filed to satisfy the
rules of more than one agency.
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    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless the collection of
information displays a valid OMB control number. A respondent must
retain the supporting records to the SAR for five years. Generally,
information collected pursuant to the Bank Secrecy Act is confidential,
but may be shared as provided by law with regulatory and law
enforcement authorities.
    Request for Comments: Comments are invited on:
    (a) Whether the collection of information is necessary for the
proper performance of the functions of the agencies, including whether
the information shall have practical utility;
    (b) The accuracy of the agencies' estimate of the burden of the
collection of information, including the validity of the methodology
and assumptions used;
    (c) Ways to enhance the quality, utility, and clarity of the
information to be collected;
    (d) Ways to minimize the burden of the collection of information on
respondents, including through the use of automated collection
techniques or other forms of information technology; and
    (e) Estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of services to provide information.
Attachment: Suspicious Activity Report by Depository Institutions

    Dated: June 12, 2006.
Donald Carbaugh,
Acting Associate Director, Regulatory Policy and Programs Division,
Financial Crimes Enforcement Network.
    Dated: June 2, 2006.
Stuart Feldstein,
Assistant Director, Legislative and Regulatory Activities Division,
Office of the Comptroller of the Currency.
    Dated: June 13, 2006.
Deborah Dakin,
Senior Deputy Chief Counsel, Regulations and Legislation Division,
Office of Thrift Supervision.
    By Order of the Board of Directors.

    Dated at Washington, DC, this 8th day of June, 2006.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
    By the National Credit Union Administration Board on June 6,
2006.
Mary Rupp,
Secretary of the Board.
BILLING CODE 4810-02-P

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[FR Doc. 06-5492 Filed 6-16-06; 8:45 am]

BILLING CODE 4810-02-C