On October 9, 2025, the Financial Crimes Enforcement Network (FinCEN) issued answers to FAQs regarding suspicious activity reports (SARs) and other anti-money laundering/countering the financing of terrorism (AML/CFT) issues affecting financial institutions covered by SAR rules. This summary of our webinar, “Bank Secrecy Update – FinCEN FAQs,” highlights some key items that institutions should consider.
SAR Filing Threshold Clarification
Financial institutions are not required to file a SAR solely because a transaction is near the $10,000 Currency Transaction Report (CTR) threshold. A SAR is only necessary if the institution knows, suspects, or has reason to suspect that the transaction is designed to evade reporting requirements. This clarification helps reduce unnecessary SAR filings and encourages institutions to focus on actual suspicious behavior, not just transaction amounts. While the clarification offers some relief, it does not eliminate the need for vigilance. Institutions should continue to assess risks and document their decision-making process to help ensure compliance.
Flexibility in Continuing Activity Reviews
Institutions are not required to conduct separate reviews every 90 days after filing a SAR. Instead, they can rely on risk-based internal policies and procedures to monitor ongoing suspicious activity. This allows for more efficient monitoring and helps reduce the burden of manual reviews, as long as internal controls are well designed and consistently applied. This flexibility is intended to reduce compliance burdens, but institutions must still monitor accounts and document their processes. The lack of updates to regulatory manuals, such as the Federal Financial Institutions Examination Council (FFIEC) manual, could lead to inconsistencies in examiner expectations. It is important that institutions maintain clear timelines and definitions for suspicious activity to avoid confusion during audits.
No Obligation to Document No-SAR Decisions
There is no regulatory requirement to document decisions not to file a SAR. While FinCEN encourages documentation, it’s optional and should be based on the institution’s internal risk-based policies. Institutions can streamline their compliance processes but should still consider maintaining concise documentation to support decisions, especially in complex cases or for examiner review. Failing to document no-SAR decisions could weaken an institution’s ability to defend its program during audits or investigations. Institutions should adopt a risk-based approach, documenting decisions when significant research or analysis is conducted.
How Forvis Mazars Can Help
The FAQs provide much-needed flexibility and relief for financial institutions, but their effectiveness will depend on how they are implemented by examiners and integrated into regulatory guidance. Institutions should carefully consider the impact of these changes on their compliance programs, update policies and procedures accordingly, and make sure that any modifications are well documented and aligned with their risk tolerance. Institutions should communicate with management, auditors, and examiners to help address these changes effectively.
Professionals at Forvis Mazars can help your institution navigate regulatory compliance. If you have any questions or need assistance, please contact us.