(Feb. 26, 2021) A comment letter supporting NCUA’s proposed rule about credit union exemptions from filing suspicious activity reports (SARs) has been submitted by NASCUS, which also some recommendations for changes in the proposal.
The letter supports NCUA’s proposed rule on the Bank Secrecy Act (BSA) providing the agency leeway to grant federally insured credit unions (FICUs) exemptions from NCUA rules implementing SAR filing requirements. More specifically, in its proposal, the agency suggested that innovative approaches and technological developments in the areas of SAR monitoring, investigation and filings may involve a variety of techniques, including automated form population, automated or limited investigation processes and enhanced monitoring processes
NASCUS wrote that emphasizing substantive SAR results over procedural compliance will result in “SAR data that is potentially of greater use to law enforcement and national security stakeholders and is consistent with the intent and spirit of the BSA.”
The association made recommendations for improvements in the proposal, intended to clarify the rule and reduce regulatory burden for credit unions. Among those recommendations:
- Commit to consulting with the appropriate state regulator when evaluating a request for an exemption;
- Clarify what “classes” or “select groups” may apply for an exemption or have a third party apply for an exemption on their behalf from certain SAR filings;
- Specify to which NCUA office to send a request for exemption.
“NASCUS and state regulators remain committed to working with stakeholders and with NCUA to ensure the credit union system is protected from bad actors that would seek to exploit that system in furtherance of criminal enterprise,” NASCUS wrote. “We strongly encourage NCUA to consider how the exemption process will be implemented within the context of affiliated or collaborating credit unions such as in shared branches or services centers, centralized CUSO compliance, and shared back-office situations.”