FinCEN And Banking Regulators Issue New FAQs On Suspicious Activity Reports

Banks and other regulated financial institutions have been digesting a set of four frequently asked questions ("FAQs") about suspicious activity reports ("SARs") issued jointly on October 9, 2025 by FinCEN and federal banking regulators (the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the National Credit Union Administration).According to remarks the same day from Treasury Secretary Scott Bessent, the FAQs are intended to reduce the compliance burdens associated with filing SARs without diminishing the benefit of SAR reporting to law enforcement.

1. No Categorical Expectation of SARs for Transactions Approaching CTR Threshold

The first FAQ relates to "structuring" SARs. Rules implementing the Bank Secrecy Act ("BSA") prohibit "structuring," which means breaking larger transactions into smaller ones to evade a reporting threshold, in particular the over $10,000 per day threshold at which financial institutions must file a currency transaction report ("CTR"). The FAQ clarifies that financial institutions are only required to file a SAR for a transaction or series of transactions with a value at or near the $10,000 threshold if the institution knows, suspects, or has reason to suspect that the transaction or series of transactions is designed to evade the CTR requirement.

Historically, many financial institutions, especially banks, have felt pressure from banking regulators to file SARs on any transaction or series of transactions approaching the CTR threshold, even in the absence of other information to suggest an intent to evade the CTR requirement. Filing multiple SARs on a customer in turn often created an expectation that the financial institution would terminate its relationship with the customer, which may have led financial institutions, in some instances, to de-bank legitimate cash-intensive businesses (e.g., restaurants, convenience stores, hair stylists, etc.) that frequently deposit or withdraw small amounts of cash. Many financial institutions have viewed such SARs as having low value and drawing resources from other activities more likely to identify financial crime — a point that FinCEN's new guidance appears to tacitly acknowledge.

2. No Categorical Expectation of Continuing Activity Review

The second FAQ relates to so-called "continuing activity reviews." FinCEN guidance from 2012 allows financial institutions, after filing an initial SAR on suspicious activity, to file additional SARs for each 90-day period in which the same suspicious activity continues. Such SARs must be filed within 30 days after the conclusion of such a 90-day period. This would result in the filing of the first "continuing activity" SAR 120 days after an initial SAR, where suspicious activity from the initial SAR continued within the 90-day period after that SAR. This was intended originally as a form of regulatory relief, allowing financial institutions to aggregate and report ongoing suspicious activity in 90-day intervals rather than filing separate SARs for each subsequent event. Over time, however, the agencies note, this has been interpreted as an expectation that financial institutions categorically will conduct a review after the filing of a SAR to determine whether the reported suspicious activity continues. Given that many financial institutions file thousands, if not tens of thousands, of SARs per year, financial institutions had long complained about the burden of this expectation of categorical continued activity reviews.

Going forward, the FAQ clarifies that financial institutions are not expected categorically to review for continuing suspicious activity, either manually or using automated tools, and instead may rely on risk-based procedures for deciding whether to review for continuing activity. The new Treasury Undersecretary for Terrorism and Financial Crimes, John Hurley, acknowledged the burden felt by financial institutions in remarksp reviewing the FAQs on September 18, 2025, saying "We've heard you: This is not a good use of resources. It is time consuming, onerous, and does not lead to valuable reporting."

3. Clarification of Reporting Timelines for Continuing Activity

The third FAQ clarifies the timeline for reporting continuing suspicious activity under the guidance noted above: a financial institution should file 30 days after the conclusion of each 90-day period in which the suspicious activity reported in an initial SAR continues. In the alternative, financial institutions retain the option of filing individual SARs on continued instances of the suspicious activity reported in an initial SAR, using the normal timelines for SAR filings — 30 days after the detection of facts that provide the basis for filing a SAR, or 60 days where no suspect can be identified.

4. No Requirement to Document No-SAR Decisions

The fourth and final FAQ clarifies that financial institutions are not required to document decisions not to file a SAR, despite previous FinCEN guidance encouraging such documentation. In his remarks previewing the FAQs on September 18, 2025, Undersecretary Hurley acknowledged the complaint of industry that financial institutions had been "expected to maintain an increasingly onerous level of documentation supporting the decision not to file a SAR."

The FAQ also clarifies that, even in cases where a financial institution chooses to document a decision not to file, "a short, concise statement documenting a financial institution's SAR decision" will usually suffice. Of course, many financial institutions may opt to continue documenting no-SAR decisions for a range of reasons even when not required, including, in certain instances, where documenting the decision not to file a SAR would provide a useful contemporaneous record of an institution's reasoning if that decision is subsequently challenged by a regulator. The new guidance, however, provides financial institutions with regulatory cover to take a more measured and strategic approach to such documentation. Historically, banks have been most likely to experience the regulatory expectations and related burdens addressed by the new FAQs, and are likely to derive the most relief from this guidance. However, the FAQs by their terms apply to all BSA-regulated financial institutions subject to a SAR requirement,e.g.,broker-dealers and money services businesses.

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