Agency Information Collection Activities; Submission for OMB Review; Comment Request; Suspicious Activity Report

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: TD F 90-22.47 OCC: None 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 financial institutions operating in the United States to report

known or suspected criminal activities to the appropriate law enforcement agencies and the agencies. 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 ---------------------------------------------------------------------------

\1\ The report is authorized by the following rules: 31 CFR 103.21 (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). ---------------------------------------------------------------------------

Comments Received: On September 28, 1999, the agencies requested public comment for 60 days on the proposed revisions to the Suspicious Activity Report (64 FR 52363). The agencies received 17 comments, generally favorable, regarding the proposal. Three commenters were banking trade associations; three were national banks; two were credit union trade associations, two were credit unions, two were foreign banks, two were OCC employees, one was a state bank, and one was a brokerage house and a bank holding company. Further discussion of the comments received and action taken in response to those comments occurs later in this Notice. Current Actions: The agencies are proposing to revise the SAR to a certain extent, but are not proposing to make substantial additions to the content of the information collected. The revisions would address a number of data collection, entry, and analysis problems encountered by filers and the end users of the information. In general, the revisions conform all date items to a four-digit year (Year 2000 change), make a number of other ministerial changes such as renumbering items, clarify the form, improve its usefulness to law enforcement and the agencies, and adopt various commenters' suggestions. The agencies are expanding the blocks for a number of items to provide additional room for the requested information. Thus, the Zip Code blocks are expanded to provide room for a nine-digit Zip Code. Dollar blocks are expanded to provide more room for amounts (and lines are added to these items to separate digits). A number of items now on the form are deleted. The questions regarding the asset size of the financial institution (Item 10 of the form now in use) is deleted. The question asking for the address of the law enforcement agency contacted is deleted and is replaced by a question asking for the name and telephone number of the person contacted in the law enforcement agency. The section ``Witness Information'' (Part IV of the form now is use) and the section ``Preparer Information'' (Part V of the form now in use) are deleted. The section ``Contact Information'' (Part VI of the form now in use) is all that will be required and the ``Institution Contact'' will be expected to be able to provide witness and preparer information to the agencies and to law enforcement investigators. The agencies are clarifying several items on the form. The question concerning the type of report is clarified by eliminating ``Initial Report'' and ``Supplemental Report.'' Thus, the question asks only whether the report being filed is an ``Amended Report.'' If the report is an initial report or a supplemental report, the filer should just leave this question blank. However, if the report is correcting an earlier report, the filer should mark the ``Amended Report'' box and should fill out the information as directed on the form. The question regarding insider relationships is clarified by adding a box that asks, initially, whether the relationship is an insider relationship. A check box is added to the heading of Suspect Information for use if suspect information is unavailable. Under the section entitled Suspicious Activity Information, instead of the space now on the form for writing in the name of the law enforcement agency contacted, check boxes are added for indicating the specific law enforcement agency contacted. The instruction regarding the type of instrument involved (Part VII of the form now in use, Instruction k) is clarified by adding examples of the types of instruments. The agencies are revising the question regarding the summary characterization of the activity by adding a new box ``Computer Intrusion.'' In the past, filers reporting computer intrusions either checked the ``Other'' box (Item 37r of the form now in use) and provided additional information in the space beside the box, or provided the information on the summary page. Additionally, the agencies are expanding the instructions to provide guidance regarding the circumstances constituting computer intrusion. Comments Received and Agency Action Taken. The commenters raised various issues, some of which will need further agency monitoring and consideration, and others which can be resolved by fine-tuning the SAR. The comments, sorted by subject, and the agencies' responses follow.

I. Further Agency Monitoring and Consideration

Commenters suggested some areas of change that will require further agency monitoring and consideration. Some of the comments did not pertain to the issuance of the SAR and, consequently, will not be addressed here. Two of the comments were as follows: (1) Incorrect SARs: One commenter suggested that FinCEN should return an incorrectly completed SAR to the institution submitting it so that the SAR can be resubmitted correctly. The agencies agree with the commenter's concerns and believe that accurate and complete SAR filings are important to an effective program. The SAR data base manager is in the process of developing an error resolution process for the system. However, the primary responsibility for accurately filling out a SAR and reviewing its accuracy falls to the management and staff of the institution. If an institution determines that it has filed an inaccurate or incomplete SAR, it should timely file an amended form. (2) Electronic Filing: Two commenters indicated that it would be beneficial to allow for electronic filing of the SAR. The agencies agree that the ability to file SARs electronically would be beneficial and are working towards that goal, keeping in mind the security and confidentiality issues associated with such filings.

II. SAR Changes Considered

The 17 commenters made several suggestions regarding revisions to the SAR itself. Those suggestions and the agencies' responses to those suggestions follow. (1) Initial/Supplemental/Amended Reports. The SAR should explain the box for supplemental reports. In order to streamline the form, the agencies are removing the check boxes for ``Initial Report'' and ``Supplemental Report.'' Instead, a box for amended reports is added for use only if the filer is correcting a prior report. (2) Primary Regulator. Item 3 of the form now in use should be modified to include the Securities and Exchange Commission (SEC) as a ``Primary Federal Regulator.'' The agencies believe that it is unnecessary to add the SEC to this field as the SAR is designed for use by the agencies and by the financial institutions that the agencies supervise. (3) Location of Branch Where Activity Occurred. The SAR should be clarified to indicate which branch or subsidiary of a foreign bank should file the SAR and which primary regulator should be identified.

The agencies believe that the branch where the suspicious activity occurred should be the branch that is identified under the heading Reporting Financial Institution Information. In addition, the SAR should identify as the Primary Federal Regulator the agency that supervises the branch or subsidiary where the suspicious activity occurred. (4) Multiple Branches. The SAR should be corrected with regard to the instructions for listing multiple branches because there are no such instructions given. In addition, the form should provide for an entry which indicates, when appropriate, that no branch was involved. The agencies agree with the first of these two comments and are striking the phrase ``(see instructions)'' in Item 9 of the proposed form. The agencies will place the directions for listing multiple branches on the form. With regard to the second comment, the agencies note that if no branch is involved, the filer can simply leave that part of the form blank. (5) Multiple Suspects. There should be a way for an institution to enter multiple suspects without preparing a duplicate page 1 which asks for institution-related information as well as suspect-related information. The institution, in filling out multiple pages for additional suspect information, can simply leave the institution-related information on the multiple pages blank since it was already provided on page 1. (6) Forms of Identification. In Item 28 of the proposed form, 28(e) and (f) should be deleted and the information requested, ``number'' and ``issuing authority'' of the form of identification, should be incorporated within 28(a)-(d). The agencies agree with this suggestion and are modifying this item so that the identifying number and issuing authority are listed next to each form of identification listed in 28(a)-(d). (7) Types of Suspects. The agencies should add ``Monetary Instrument Purchaser'' and ``Account Applicant'' to the list of types of suspects and their relationship to the institution in Item 31 of the form currently in use. The agencies believe that this addition is unnecessary. An institution can indicate ``Customer'' in these situations (although in some instances the individual may be turned away as an actual customer) or the institution can use the ``Other'' category. (8) No Relationship to Institution. There should be a box within Item 31 of the form currently in use for the filer to indicate that the suspect has no relationship with the institution. The agencies believe that this is unnecessary since the filer can either leave this section blank or can use the ``Other'' line to indicate the nature of the suspect. (9) Confession. Item 34 of the form currently in use and Item 32 of the proposed form should be moved so that it is not juxtaposed to insider related information and thus confusing as to whether it applies only to insiders. The agencies wish to collect information concerning a confession with regard to all suspects. Consequently, to clarify this, the agencies will physically move this item on the form so that it is separate from the insider related information. (10) Range of Dates. The form should permit the filer to put down a range of dates over which the suspicious activity occurred rather than just one date. The proposed form, in Item 33, will permit the filer to put in a range of dates. (11) Computer Intrusion. The agencies should better define computer intrusion. Further, they should include specific examples of what would and would not be covered. The agencies believe that the current definition is appropriate. (12) Identity Theft. There should be an additional box under Item 37 of the form currently in use, ``Summary characterization of suspicious activity,'' to include ``identity theft'' as a specific category. The agencies agree that identity theft is an important category of criminal activity. However, identity theft is frequently linked with other crimes that are specifically enumerated on the SAR, such as check fraud and credit card fraud. In addition, there are already 18 specific boxes under this category and institutions can use the ``Other'' box to report identity theft. Therefore, the agencies have decided, at this time, not to revise the SAR to include ``identity theft'' as a new category and expect that institutions will continue to use the ``Other'' box, or use other appropriate boxes. The agencies will continue to monitor this area and will reconsider their decision if warranted. (13) Contacting Law Enforcement. In Item 40 of the proposed form there should be a ``Yes/No'' box indicating whether or not the filer has contacted a law enforcement agency. The agencies believe that such a change is unnecessary since answering this item or leaving it blank will indicate whether or not the filer has contacted a law enforcement agency. Further, the agencies wish to eliminate as many entries on the form as possible. (14) Witness Information. The agencies should either delete Part IV of the form currently in use, pertaining to Witness Information, or they should delete the requirement for a social security number of the witness. This requirement is unnecessary and potentially invasive of the individual's privacy. The agencies agree with these comments and have decided to delete Part IV altogether. The agencies, however, expect that the ``Institution Contact,'' named in Part VI of the form currently in use, will maintain or will have access to all pertinent documentation and witness information for the agencies and law enforcement. (15) Preparer Information. The agencies should retain Part V of the form currently in use, pertaining to Preparer Information, so that the ``Institution Contact'' can readily determine who prepared the form and where the necessary underlying information is. The agencies believe that the ``Institution Contact'' should be able to maintain this information without the assistance of the form. In addition, as noted above, the agencies wish to eliminate as many entries on the form as possible. (16) Instructions on the Narrative Explanation. The agencies should highlight the instructions in Part VII of the form currently in use, pertaining to the narrative explanation, by moving the instruction ``If necessary, continue the narrative on a duplicate of this page,'' to the bottom of the page and putting it in bold type. In order to highlight this instruction, the agencies will put the instruction in bold type, but will leave it where it is, at the top of the page. (17) Instructions on the Narrative Explanation. The agencies should delete many of the instructions in Part VII of the form currently in use in that they do not pertain strictly to the requirement for a narrative explanation. The agencies believe that it is appropriate to retain in this section of the proposed form all the existing instructions contained in Part VII of the form currently in use. Type of Review: Revision of a currently approved collection. Affected Public: Business, for-profit institutions, and non-profit institutions. Estimated Number of Respondents:

FinCEN: 18,600 \2\ ---------------------------------------------------------------------------

\2\ Many respondents included in this estimate are also counted in the agencies' estimates. ---------------------------------------------------------------------------

OCC: 3,000 OTS: 925 FDIC: 6,500 NCUA: 4,200

Estimated Total Annual Responses:

FinCEN: 47,500 OCC: 45,527 OTS: 2,081 FDIC: 6,500 NCUA: 4,200

Estimated Total Annual Burden:

(Note: The agencies have estimated 30 minutes per form.)

FinCEN: 23,750 hours \3\ ---------------------------------------------------------------------------

\3\ A respondent need only file one form. The estimated burden per form is 30 minutes; this estimate does not allocate time between agencies when copies of the form are filed to satisfy the rules of more than one agency. ---------------------------------------------------------------------------

OCC: 30,160 hours OTS: 1,041 hours FDIC: 3,250 hours NCUA: 2,100 hours

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; (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.

Dated: December 27, 1999. Connie J. Fenchel, Acting Director, Financial Crimes Enforcement Network.

Dated: December 29, 1999. Karen Solomon, Director, Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency.

Dated: December 28, 1999. Frank DiGialleonardo, Chief Information Officer and Director, Office of Information Systems, Office of Thrift Supervision.

By Order of the Board of Directors.

Dated at Washington, DC, this 28th day of December, 1999.

Federal Deposit Insurance Corporation. Robert E. Feldman, Executive Secretary.

By the National Credit Union Administration Board on December 23, 1999. Becky Baker, Secretary of the Board. [FR Doc. 00-189 Filed 1-6-00; 8:45 am] BILLING CODE 4820-03-P