New streamlined rules for reporting suspicious activity got glowing reviews from bankers this week.
The finalized rules, which take effect April 1, will allow banks to file one suspicious activity report to the Treasury Department's Financial Crimes Enforcement Network, rather than to seven or eight agencies as previously required.
"Narrowing down the reporting to one single agency is going to be just phenomenal," said Charlie Bock, director of fraud prevention and investigation at Chemical Bank. The new suspicious activity report replaces the Criminal Referral Form and a box on Currency Transaction Reports.
The rules, which are the result of a four-year interagency effort, also contain new protections against customer lawsuits for bankers who report suspicious activities. John Byrne, senior counsel for the American Bankers Association, said the threat of civil liability from customers may have led some bankers to avoid filing suspicious activity reports.
"Bankers have always argued that they've had this mandate to report suspicious activities, but they've been open to civil liability," Mr. Byrne said. "Now bankers won't have to think twice before sending in the form."
Another key provision praised by bankers will raise the dollar thresholds for reporting suspicious activities. Under the new regulation, the threshold for reporting suspected crimes is $5,000, up from $1,000, in instances where the bank has identified a suspect who is not a bank insider. (Bank insider suspects still must be reported regardless of the dollar amount of the questionable activity.) If no suspect has been identified, the threshold is $25,000, up from $5,000.
"The new thresholds will help a lot with check and credit card fraud," said Richard C. Insley, vice president of Signet Banking Corp. "There's no question it will cut out a lot of the filing volume."
Bankers also will be able to file reports using software expected from Treasury by the end of February. The ABA will hold seminars with Fincen and Internal Revenue Service officials in late March to help bankers get acquainted with the new filing system.
