Regulators Clarify What Credit Unions Can Tell Members About Suspicious Activity
By CU Today Staff —
WASHINGTON—Federal regulators have clarified that credit unions and banks may discuss potentially fraudulent transactions and account closures with customers without violating Suspicious Activity Report confidentiality requirements—as long as they do not reveal whether a SAR was or may be filed.
The joint statement from the Federal Reserve, FDIC, NCUA, OCC and FinCEN responds to financial institutions’ concerns that SAR rules limit their ability to provide customers with timely explanations during fraud investigations. Regulators stressed that the guidance does not change Bank Secrecy Act requirements or establish new supervisory expectations.
Although the BSA prohibits disclosing a SAR or information revealing its existence, that restriction does not cover the underlying facts, transactions and documents. Credit unions may discuss transaction dates, amounts and parties; ask about a transaction’s purpose or source of funds; request documentation; and warn members about fraud schemes, including money mule activity.
Institutions also may tell customers that an account restriction, rejected deposit or closure is related to suspected fraud or other suspicious activity. Regulators said such communications should be evaluated case by case and handled carefully to avoid revealing the existence of a SAR.
Originally reported by CU Today.