FinCEN Announces Extension on Use of Mandatory Forms

1/5/2012

By Fran Sponsler, CRCM, CAMS, CCBCO

On September 14, 2011, the Financial Crimes Enforcement Network (FinCEN) announced its proposal for reports that are required under the Bank Secrecy Act (BSA), be filed electronically effective, June 30, 2012. Within the same proposal, FinCEN also announced that as part of its overall technology improvement efforts, new universal Suspicious Activity Reports (SAR) and Currency Transaction Report (CTR) reports were to be developed and would replace all previous industry-specific forms. Comments on the proposal were accepted for 60 days after the publication in the Federal Register.

On December 20, 2011, FinCEN announced that the deadline for financial institutions to utilize the new CTR and SAR for reporting purposes will be extended to March 31, 2013. FinCEN noted that the deadline extension was due partly in response to industry concerns on having adequate time to transition to the new reports and for making the appropriate revisions to internal procedures and computer systems. The extension of the deadline is expected to ease the industry’s transition to the use of the new reports.

However, let’s go back to the original September 2011 proposal. It also included a mandatory date for electronically filing BSA reports by June 30, 2012. The most recent announcement did not clearly include e-filing of BSA reports in the extension.

In fact, the announcement went on to state that “FinCEN expects that the clear benefits associated with the transition to a fully electronic reporting system will support mandating electronic filing of BSA reports as of the proposed date of June 30, 2012. FinCEN will continue to consider the comments received on its proposal, and will follow the normal procedures for concluding the notice process. As reflected in the notice, for those financial institutions unable to meet the proposed electronic filing deadline, FinCEN will consider, based upon certain limited hardship exceptions, specific requests to file the most current paper forms for up to one year past the mandatory electronic filing deadline. Further information on how financial institutions can make such requests will be provided in a future notice.”

Recommendations

For those financial institutions that are not yet e-filing, we recommend reviewing FinCEN’s website for specifications on electronic filing and determining what, if any, system changes are necessary to ensure compliance. We also recommend staying abreast on future announcements concerning the availability of the new CTR and SAR reports.