It was disturbing to read the article (Many Credit Unions Not Filing SARs, CTRs: FinCEN Director) published online Sept. 15, by the Credit Union Journal reporting on comments made by Financial Crimes Enforcement Director Jennifer Shasky Calvery.
Ms. Calvery used the format of the NAFCU Congressional Caucus to state that an unusual number of credit unions are not filing the required SAR and CTR reports. Although acknowledging a possible problem with the data they have collected, her emphasis appeared to be that credit unions are lax in following FinCEN reporting requirements.
It goes without saying that the monitoring of suspicious activity is paramount in any financial institution. The proper filing of SARs and CTRs not only protects the institution, but also helps law enforcement agencies put a stop to illegal activities.
PUBLIC FORUM INAPPROPRIATE
What is disturbing about Ms. Calvery's remarks is that she did it in an open forum rather than raising her concerns with the appropriate regulatory agency, the NCUA. Common courtesy and professional business practices dictate that you express your concern about the issue with the person in charge.
Calling the Chairman of NCUA would have been appropriate.
Earlier this year a FinCEN report was leaked to the public alleging that because certain credit unions serve money businesses they were at risk of being a conduit for money laundering activities. This was despite that fact they were in full compliance in filing all SAR and CTR reports. The naming of the credit unions implied they were involved with businesses they shouldn't be as well as that money service businesses were suspect.
The pattern FinCEN is showing by publicly demeaning a segment of the financial services industry with admittedly questionable statistics needs to stop. If a problem exists it must be corrected. The way you approach correcting it must be done professionally. Working with the regulator responsible for chartering and insuring the alleged abusers perhaps is the route to take rather than the one of the bully pulpit.
Michael E. Fryzel is an attorney in Chicago and a former NCUA Chairman.
