Filing Requirements for Suspicious Activity Reports, 36720-36723 [E6-10136]
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36720
Federal Register / Vol. 71, No. 124 / Wednesday, June 28, 2006 / Proposed Rules
unions to comply with the rule’s
requirements to display the official sign.
In any event, a credit union will not be
considered in violation of § 740.4 unless
the credit union fails to display the
revised signs after receiving them from
NCUA and after a reasonable
compliance period for making changes
at teller windows, Web sites, and, if
applicable, to advertisements. NCUA
requests comment on whether a
compliance date of 60 days after
receiving the signs from NCUA would
be a reasonable period for credit unions
to come into compliance.
Regulatory Procedures
Regulatory Flexibility Act
The Regulatory Flexibility Act
requires NCUA to prepare an analysis to
describe any significant economic
impact a proposed rule may have on a
substantial number of small credit
unions (those under ten million dollars
in assets). This rule clarifies that share
accounts insured by NCUA are backed
by the full faith and credit of the United
States Government without imposing
any additional regulatory burden. This
rule would not have a significant
economic impact on a substantial
number of small credit unions, and,
therefore, a regulatory flexibility
analysis is not required.
Paperwork Reduction Act
NCUA has determined that the
proposed rule would not increase
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(f) An insured credit union that fails
to comply with Section 205(a) of the
Federal Credit Union Act regarding the
official sign, 12 U.S.C. 1785(a), or any
requirement in this part is subject to a
penalty of up to $100 per day.
Executive Order 13132
Executive Order 13132 encourages
independent regulatory agencies to
consider the impact of their actions on
state and local interests. In adherence to
fundamental federalism principles,
NCUA, an independent regulatory
agency as defined in 44 U.S.C. 3502(5),
voluntarily complies with the executive
order. The proposed rule would not
have substantial direct effects on the
states, on the connection between the
national government and the states, or
on the distribution of power and
responsibilities among the various
levels of government. NCUA has
determined that this proposed rule does
not constitute a policy that has
federalism implications for purposes of
the executive order.
The Treasury and General Government
Appropriations Act, 1999—Assessment
of Federal Regulations and Policies on
Families
The NCUA has determined that this
proposed rule would not affect family
well-being within the meaning of
section 654 of the Treasury and General
Government Appropriations Act, 1999,
Pub. L. 105–277, 112 Stat. 2681 (1998).
Agency Regulatory Goal
NCUA’s goal is to promulgate clear
and understandable regulations that
impose minimal regulatory burden. We
request your comments on whether the
proposed rule is understandable and
minimally intrusive.
List of Subjects in 12 CFR Part 740
Advertisements, Credit unions.
By the National Credit Union
Administration Board on June 22, 2006.
Mary F. Rupp,
Secretary of the Board.
For the reasons discussed above,
NCUA proposes to amend 12 CFR part
740 as follows:
PART 740—ACCURACY OF
ADVERTISING AND NOTICE OF
INSURED STATUS
1. The authority citation for part 740
continues to read as follows:
Authority: 12 U.S.C. 1766, 1781, 1789.
2. Section 740.4 is amended by
revising the depiction of the official sign
in paragraph (b) with the following
depiction of the official sign and by
adding new paragraph (f) to read as
follows:
§ 740.4
*
Requirements for the official sign.
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(b) * * *
*
*
3. Section 740.5(c)(11) is amended by
removing ‘‘of $100,000’’ and adding in
its place ‘‘insurance amount’’.
NATIONAL CREDIT UNION
ADMINISTRATION
[FR Doc. 06–5742 Filed 6–27–06; 8:45 am]
12 CFR Part 748
BILLING CODE 7535–01–P
Filing Requirements for Suspicious
Activity Reports
National Credit Union
Administration (NCUA).
AGENCY:
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paperwork requirements under the
Paperwork Reduction Act of 1995 and
regulations of the Office of Management
and Budget.
Federal Register / Vol. 71, No. 124 / Wednesday, June 28, 2006 / Proposed Rules
ACTION:
Notice of proposed rulemaking
(NPR).
The proposed rule describes
in greater detail the requirements for
reporting and filing a Suspicious
Activity Report (SAR) and addresses
prompt notification of the board of
directors of SAR filings, the
confidentiality of reports, and liability
protection. NCUA also proposes to
change the heading for this part so it
more accurately describes its scope.
While retaining cross-references in the
rule to the SAR form and instructions,
these changes will enhance credit union
compliance by providing greater detail
in the rule on the thresholds and
procedures for filing a SAR.
DATES: Comments must be received on
or before August 28, 2006.
ADDRESSES: You may submit comments
by any of the following methods (Please
send comments by one method only):
• NCUA Web site: https://
www.ncua.gov/Regulations
OpinionsLaws/proposed_regs/
proposed_regs.html. Follow the
instructions for submitting comments.
• E-mail: Address to
regcomments@ncua.gov. Include ‘‘[Your
name] Comments on Notice of Proposed
Rulemaking (Suspicious Activity
Report)’’ in the e-mail subject line.
• Fax: (703) 518–6319. Use the
subject line described above for e-mail.
• Mail: Address to Mary Rupp,
Secretary of the Board, National Credit
Union Administration, 1775 Duke
Street, Alexandria, Virginia 22314–
3428.
• Hand Delivery/Courier: Same as
mail address.
FOR FURTHER INFORMATION CONTACT:
Linda K. Dent, Staff Attorney, Office of
General Counsel, at the above address or
telephone (703) 518–6540.
SUPPLEMENTARY INFORMATION: NCUA’s
policy is to review regulations
periodically to ‘‘update, clarify and
simplify existing regulations and
eliminate redundant and unnecessary
provisions.’’ Interpretive Ruling and
Policy Statement (IRPS) 87–2,
Developing and Reviewing Government
Regulations. NCUA notifies the public
about the review, which is conducted
on a rolling basis so that a third of its
regulations are reviewed each year. The
changes in this proposed rule are the
result of NCUA review under IRPS 87–
2.
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SUMMARY:
B. Proposed Changes
Suspicious Activity Report
The proposed rule modifies § 748.1(c)
by describing more clearly the
reportable activity this section covers,
VerDate Aug<31>2005
15:27 Jun 27, 2006
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identifying important filing procedures,
and highlighting record retention
requirements. The proposal includes in
the rule other key aspects of the SAR
process including the confidentiality of
the reports, and safe harbor information,
as well as, adds a provision requiring a
credit union to keep its board of
directors promptly informed of its SAR
reporting activity.
While the changes expand the amount
of information contained in the rule,
they do not increase credit unions’
regulatory burden. The changes are
intended to provide fundamental
information about the SAR process in a
single location to facilitate the ability of
credit unions to quickly access reporting
and filing requirements. The board
notification provision formalizes a
common practice and, together with the
other proposed changes, provides
consistency with the SAR regulations
established by the other Federal
Financial Institutions Examination
Counsel regulators. The changes are not
intended to and do not eliminate the
need for credit unions to review the
instructions accompanying the SAR
form and the requirements of 31 CFR
part 103.18, which may be necessary to
ensure a report is accurately and fully
completed.
Heading
36721
Paperwork Reduction Act
The Office of Management and Budget
assigned 3133–0094 as the control
number for NCUA’s Form 2362. NCUA
has determined that the proposed
amendments will not increase
paperwork requirements and a
paperwork reduction analysis is not
required.
Executive Order 13132
Executive Order 13132 encourages
independent regulatory agencies to
consider the impact of their actions on
state and local interests. In adherence to
fundamental federalism principles,
NCUA, an independent regulatory
agency as defined in 44 U.S.C. 3502(5),
voluntarily complies with the executive
order. The proposed rule would not
have substantial direct effects on the
states, on the connection between the
national government and the states, or
on the distribution of power and
responsibilities among the various
levels of government. NCUA has
determined that this proposed rule does
not constitute a policy that has
federalism implications for purposes of
the executive order.
The Treasury and General Government
Appropriations Act, 1999—Assessment
of Federal Regulations and Policies on
Families
NCUA proposes to revise the heading
for part 748 to read ‘‘Security Program,
Report of Suspected Crimes, Suspicious
Transactions, Catastrophic Acts and
Bank Secrecy Act Compliance.’’ The
amended heading aids users of NCUA
Regulations by fully describing the
contents of part 748.
NCUA has determined that this
proposed rule would not affect family
well-being within the meaning of
section 654 of the Treasury and General
Government Appropriations Act, 1999,
Pub. L. 105–277, 112 Stat. 2681 (1998).
Request for Comment
Credit unions, Suspicious Activity
Report.
The NCUA Board is interested in
receiving comments on the proposed
amendments to part 748.
Regulatory Procedures
Regulatory Flexibility Act
The Regulatory Flexibility Act
requires NCUA to prepare an analysis to
describe any significant economic
impact a proposed rule may have on a
substantial number of small credit
unions (those under $10 million in
assets). This proposed rule modifies the
language of a preexisting requirement
for federally-insured credit unions to
file reports of suspected crimes and
suspicious activity. The proposed rule,
therefore, will not have a significant
economic impact on a substantial
number of small credit unions and a
regulatory flexibility analysis is not
required.
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List of Subjects in 12 CFR Part 748
By the National Credit Union
Administration Board on June 22, 2006.
Mary Rupp,
Secretary of the Board.
For the reasons stated in the
preamble, the National Credit Union
Administration proposes to amend 12
CFR part 748 as set forth below:
PART 748—SECURITY PROGRAM,
REPORT OF SUSPECTED CRIMES,
SUSPICIOUS TRANSACTIONS,
CATASTROPHIC ACTS AND BANK
SECRECY ACT COMPLIANCE
1. The authority citation for part 748
continues to read as follows:
Authority: 12 U.S.C. 1766(a) and 1786(q);
31 U.S.C. 5311.
2. Section 748.1(c) is revised to read
as follows:
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36722
§ 748.1
Federal Register / Vol. 71, No. 124 / Wednesday, June 28, 2006 / Proposed Rules
Filing of reports.
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(c) Suspicious Activity Report. A
credit union must file a report of any
known or suspected crime or any
suspicious transaction related to money
laundering activity or a violation of the
Bank Secrecy Act. For the purposes of
this paragraph (c) credit union means a
federally-insured credit union and
official means any member of the board
of directors or a volunteer committee.
(1) Reportable activity. Transaction
for purposes of this paragraph means a
deposit, withdrawal, transfer between
accounts, exchange of currency, loan,
extension of credit, purchase or sale of
any stock, bond, share certificate, or
other monetary instrument or
investment security, or any other
payment, transfer, or delivery by,
through, or to a financial institution, by
whatever means effected. A credit union
must report any known or suspected
crime or any suspicious transaction
related to money laundering or other
illegal activity, for example, terrorism
financing, loan fraud, or embezzlement,
or a violation of the Bank Secrecy Act
by sending a completed suspicious
activity report (SAR) to the Financial
Crimes Enforcement Network (FinCEN)
in the following circumstances:
(i) Insider abuse involving any
amount. Whenever the credit union
detects any known or suspected federal
criminal violations, or pattern of
criminal violations, committed or
attempted against the credit union or
involving a transaction or transactions
conducted through the credit union,
where the credit union believes it was
either an actual or potential victim of a
criminal violation, or series of criminal
violations, or that the credit union was
used to facilitate a criminal transaction,
and the credit union has a substantial
basis for identifying one of the credit
union’s officials, employees, or agents
as having committed or aided in the
commission of the criminal violation,
regardless of the amount involved in the
violation;
(ii) Transactions aggregating $5,000 or
more where a suspect can be identified.
Whenever the credit union detects any
known or suspected federal criminal
violation, or pattern of criminal
violations, committed or attempted
against the credit union or involving a
transaction or transactions conducted
through the credit union, and involving
or aggregating $5,000 or more in funds
or other assets, where the credit union
believes it was either an actual or
potential victim of a criminal violation,
or series of criminal violations, or that
the credit union was used to facilitate a
criminal transaction, and the credit
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15:27 Jun 27, 2006
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union has a substantial basis for
identifying a possible suspect or group
of suspects. If it is determined before
filing this report that the identified
suspect or group of suspects has used an
alias, then information regarding the
true identity of the suspect or group of
suspects, as well as alias identifiers,
such as drivers’ licenses or social
security numbers, addresses and
telephone numbers, must be reported;
(iii) Transactions aggregating $25,000
or more regardless of potential suspects.
Whenever the credit union detects any
known or suspected Federal criminal
violation, or pattern of criminal
violations, committed or attempted
against the credit union or involving a
transaction or transactions conducted
through the credit union, involving or
aggregating $25,000 or more in funds or
other assets, where the credit union
believes it was either an actual or
potential victim of a criminal violation,
or series of criminal violations, or that
the credit union was used to facilitate a
criminal transaction, even though the
credit union has no substantial basis for
identifying a possible suspect or group
of suspects; or
(iv) Transactions aggregating $5,000
or more that involve potential money
laundering or violations of the Bank
Secrecy Act. Any transaction conducted
or attempted by, at or through the credit
union and involving or aggregating
$5,000 or more in funds or other assets,
if the credit union knows, suspects, or
has reason to suspect:
(A) The transaction involves funds
derived from illegal activities or is
intended or conducted in order to hide
or disguise funds or assets derived from
illegal activities (including, without
limitation, the ownership, nature,
source, location, or control of such
funds or assets) as part of a plan to
violate or evade any federal law or
regulation or to avoid any transaction
reporting requirement under Federal
law;
(B) The transaction is designed to
evade any regulations promulgated
under the Bank Secrecy Act; or
(C) The transaction has no business or
apparent lawful purpose or is not the
sort of transaction in which the
particular member would normally be
expected to engage, and the credit union
knows of no reasonable explanation for
the transaction after examining the
available facts, including the
background and possible purpose of the
transaction.
(v) Exceptions. A credit union is not
required to file a SAR for a robbery or
burglary committed or attempted that is
reported to appropriate law enforcement
authorities, or for lost, missing,
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counterfeit, or stolen securities and the
credit union files a report pursuant to
the reporting requirements of 17 CFR
240.17f–1.
(2) Filing Procedures. (i) Timing. A
credit union must file a SAR with
FinCEN no later than 30 calendar days
from the date the suspicious activity is
initially detected, unless there is no
identified suspect on the date of
detection. If no suspect is identified on
the date of detection, a credit union may
use an additional 30 calendar days to
identify a suspect before filing a SAR. In
no case may a credit union take more
than 60 days from the date it initially
detects a reportable transaction to file a
SAR. In situations involving violations
requiring immediate attention, such as
ongoing money laundering schemes, a
credit union must immediately notify,
by telephone, an appropriate law
enforcement authority and its
supervisory authority, in addition to
filing a SAR.
(ii) Content. A credit union must
complete, fully and accurately, SAR
form TDF 90–22.47, Suspicious Activity
Report (also known as NCUA Form
2362) in accordance with the form’s
instructions and 31 CFR part 103.18. A
copy of the SAR form may be obtained
from the credit union resources section
of NCUA’s Web site, https://
www.ncua.gov, or the regulatory section
of FinCEN’s Web site, https://
www.fincen.gov.
(iii) Compliance. Failure to file a SAR
as required by the form’s instructions
and 31 CFR part 103.18 may subject the
credit union, its officials, employees,
and agents to the assessment of civil
money penalties or other administrative
actions.
(3) Retention of Records. A credit
union must maintain a copy of any SAR
that it files and the original or business
record equivalent of all supporting
documentation to the report for a period
of five years from the date of the report.
Supporting documentation must be
identified and maintained by the credit
union as such. Supporting
documentation is considered a part of
the filed report even though it should
not be actually filed with the submitted
report. A credit union must make all
supporting documentation available to
appropriate law enforcement authorities
and its regulatory supervisory authority
upon request.
(4) Notification to board of directors.
(i) Generally. The management of the
credit union must promptly notify its
board of directors, or a committee
designated by the board of directors to
receive such notice, of any SAR filed.
(ii) Suspect is a director or committee
member. If a credit union files a SAR
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Federal Register / Vol. 71, No. 124 / Wednesday, June 28, 2006 / Proposed Rules
and the suspect is a director or member
of a committee designated by the board
of directors to receive notice of SAR
filings, the credit union may not notify
the suspect, pursuant to 31 U.S.C.
5318(g)(2), but must notify all directors
who are not suspects.
(5) Confidentiality of reports. SARs
are confidential. Any credit union,
including its officials, employees, and
agents, subpoenaed or otherwise
requested to disclose a SAR or the
information in a SAR must decline to
produce the SAR or to provide any
information that would disclose that a
SAR was prepared or filed, citing this
part, applicable law , for example, 31
U.S.C. 5318(g), or both, and notify
NCUA of the request.
(6) Safe Harbor. Any credit union,
including its officials, employees, and
agents, that makes a report of suspected
or known criminal violations and
suspicious activities to law enforcement
and financial institution supervisory
authorities, including supporting
documentation, are protected from
liability for any disclosure in the report,
or for failure to disclose the existence of
the report, or both, to the full extent
provided by 31 U.S.C. 5318(g)(3). This
protection applies if the report is filed
pursuant to this part or is filed on a
voluntary basis.
[FR Doc. E6–10136 Filed 6–27–06; 8:45 am]
BILLING CODE 7535–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2006–23739; Directorate
Identifier 2005–NM–240–AD]
RIN 2120–AA64
Airworthiness Directives; Empresa
Brasileira de Aeronautica S.A.
(EMBRAER) Model EMB–145, –145ER,
–145MR, –145LR, –145XR, –145MP, and
–145EP Airplanes
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SUMMARY: The FAA withdraws a notice
of proposed rulemaking (NPRM) that
proposed a new airworthiness directive
(AD) for certain EMBRAER Model EMB–
145, –145ER, –145MR, –145LR, –145XR,
–145MP, and –145EP airplanes. The
proposed AD would have required
modifying the routing of wire harness
W407 near the fire extinguishing tube in
the area of each engine, and installing
15:27 Jun 27, 2006
Jkt 208001
Discussion
We proposed to amend part 39 of the
Federal Aviation Regulations (14 CFR
part 39) with a notice of proposed
rulemaking (NPRM) for a new AD for
certain EMBRAER Model EMB–145,
–145ER, –145MR, –145LR, –145XR,
–145MP, and –145EP airplanes. That
NPRM was published in the Federal
Register on February 2, 2006 (71 FR
5626). The NPRM would have required
modifying the routing of wire harness
W407 near the fire extinguishing tube in
the area of each engine, and installing
new supports for related wiring. The
NPRM resulted from reports of chafing
of wire harness W407 against the
supports and nacelle structure in the
engine area. The proposed actions were
intended to prevent such chafing, which
could result in an engine shutting down
during flight.
Actions Since NPRM Was Issued
Federal Aviation
Administration (FAA), Department of
Transportation (DOT).
ACTION: Proposed rule; withdrawal.
AGENCY:
VerDate Aug<31>2005
new supports for related wiring. Since
the proposed AD was issued, we have
received new data indicating that the
identified unsafe condition does not
exist. Accordingly, the proposed AD is
withdrawn.
ADDRESSES: You may examine the AD
docket on the Internet at https://
dms.dot.gov, or in person at the Docket
Management Facility office between 9
a.m. and 5 p.m., Monday through
Friday, except Federal holidays. The
Docket Management Facility office
(telephone (800) 647–5227) is located on
the plaza level of the Nassif Building at
the U.S. Department of Transportation,
400 Seventh Street SW., Room PL–401,
Washington, DC. This docket number is
FAA–2006–23739; the directorate
identifier for this docket is 2005–NM–
240–AD.
FOR FURTHER INFORMATION CONTACT:
Todd Thompson, Aerospace Engineer,
International Branch, ANM–116, FAA,
Transport Airplane Directorate, 1601
Lind Avenue, SW., Renton, Washington
98055–4056; telephone (425) 227–1175;
fax (425) 227–1149.
SUPPLEMENTARY INFORMATION:
Since we issued the NPRM, the
airplane manufacturer, EMBRAER, has
provided additional information
concerning the unsafe condition
identified in the NPRM. EMBRAER
Service Bulletin 145–71–0008, Change
01, dated July 24, 2001 (which was
referenced as the appropriate source of
service information for accomplishing
the proposed actions), addressed
chafing of wire harness W407 on the
left- and right-hand engines. However,
EMBRAER subsequently indicates that
the objective of that service bulletin was
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36723
not considered to be a means to avoid
in-flight shutdown (IFSD) and, in fact,
wire harness W407 is not engine control
related. The harness is related to the
engine lip anti-ice system, starter
control valve, engine fire detection
system, and engine bleed air extraction
systems. None of these systems are
possible contributors to an
uncommanded IFSD. In addition,
reported IFSD events in the EMB–145
fleet related to chafing of a different
harness—the engine control harness—
are associated with the engine
manufacturer-provided harness, which
is not the subject of EMBRAER Service
Bulletin 145–71–0008.
EMBRAER states that chafing (among
other things) of the engine control
system harness can cause internal
failure of the full authority digital
engine control (FADEC), which leads to
a fuel shutoff valve closure command.
However, in May 2001, EMBRAER
introduced FADEC internal
modifications for airplanes in
production to prevent an inadvertent
IFSD. Also, for FADECs manufactured
before May 2001, Rolls-Royce, the
engine manufacturer, developed an
external adapter with the same design
objectives as those of EMBRAER’s
internal modifications. These adapters
have already been sent to operators to
install in their affected airplanes.
EMBRAER adds that the engine
inspection tasks from the airplane
maintenance program have been revised
and improved, as well as the engine
harness inspection and installation tasks
in the aircraft maintenance manual
(AMM).
FAA’s Conclusions
Upon further consideration, we have
determined that the unsafe condition
identified in the NPRM does not exist.
Accordingly, the NPRM is withdrawn.
We have coordinated this action with
the Departamento de Aviacao Civil
¸˜
(DAC), which is the airworthiness
authority for Brazil. The DAC indicates
it is considering cancelling its related
airworthiness directive, 2005–10–05,
which was effective November 17, 2005.
Withdrawal of the NPRM does not
preclude the FAA from issuing another
related action or commit the FAA to any
course of action in the future.
Regulatory Impact
Since this action only withdraws an
NPRM, it is neither a proposed nor a
final rule and therefore is not covered
under Executive Order 12866, the
Regulatory Flexibility Act, or DOT
Regulatory Policies and Procedures (44
FR 11034, February 26, 1979).
E:\FR\FM\28JNP1.SGM
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]]>Agencies
[Federal Register Volume 71, Number 124 (Wednesday, June 28, 2006)]
[Proposed Rules]
[Pages 36720-36723]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-10136]
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NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 748
Filing Requirements for Suspicious Activity Reports
AGENCY: National Credit Union Administration (NCUA).
[[Page 36721]]
ACTION: Notice of proposed rulemaking (NPR).
-----------------------------------------------------------------------
SUMMARY: The proposed rule describes in greater detail the requirements
for reporting and filing a Suspicious Activity Report (SAR) and
addresses prompt notification of the board of directors of SAR filings,
the confidentiality of reports, and liability protection. NCUA also
proposes to change the heading for this part so it more accurately
describes its scope. While retaining cross-references in the rule to
the SAR form and instructions, these changes will enhance credit union
compliance by providing greater detail in the rule on the thresholds
and procedures for filing a SAR.
DATES: Comments must be received on or before August 28, 2006.
ADDRESSES: You may submit comments by any of the following methods
(Please send comments by one method only):
NCUA Web site: https://www.ncua.gov/ Regulations
OpinionsLaws/proposed--regs/ proposed--regs.html. Follow the
instructions for submitting comments.
E-mail: Address to regcomments@ncua.gov. Include ``[Your
name] Comments on Notice of Proposed Rulemaking (Suspicious Activity
Report)'' in the e-mail subject line.
Fax: (703) 518-6319. Use the subject line described above
for e-mail.
Mail: Address to Mary Rupp, Secretary of the Board,
National Credit Union Administration, 1775 Duke Street, Alexandria,
Virginia 22314-3428.
Hand Delivery/Courier: Same as mail address.
FOR FURTHER INFORMATION CONTACT: Linda K. Dent, Staff Attorney, Office
of General Counsel, at the above address or telephone (703) 518-6540.
SUPPLEMENTARY INFORMATION: NCUA's policy is to review regulations
periodically to ``update, clarify and simplify existing regulations and
eliminate redundant and unnecessary provisions.'' Interpretive Ruling
and Policy Statement (IRPS) 87-2, Developing and Reviewing Government
Regulations. NCUA notifies the public about the review, which is
conducted on a rolling basis so that a third of its regulations are
reviewed each year. The changes in this proposed rule are the result of
NCUA review under IRPS 87-2.
B. Proposed Changes
Suspicious Activity Report
The proposed rule modifies Sec. 748.1(c) by describing more
clearly the reportable activity this section covers, identifying
important filing procedures, and highlighting record retention
requirements. The proposal includes in the rule other key aspects of
the SAR process including the confidentiality of the reports, and safe
harbor information, as well as, adds a provision requiring a credit
union to keep its board of directors promptly informed of its SAR
reporting activity.
While the changes expand the amount of information contained in the
rule, they do not increase credit unions' regulatory burden. The
changes are intended to provide fundamental information about the SAR
process in a single location to facilitate the ability of credit unions
to quickly access reporting and filing requirements. The board
notification provision formalizes a common practice and, together with
the other proposed changes, provides consistency with the SAR
regulations established by the other Federal Financial Institutions
Examination Counsel regulators. The changes are not intended to and do
not eliminate the need for credit unions to review the instructions
accompanying the SAR form and the requirements of 31 CFR part 103.18,
which may be necessary to ensure a report is accurately and fully
completed.
Heading
NCUA proposes to revise the heading for part 748 to read ``Security
Program, Report of Suspected Crimes, Suspicious Transactions,
Catastrophic Acts and Bank Secrecy Act Compliance.'' The amended
heading aids users of NCUA Regulations by fully describing the contents
of part 748.
Request for Comment
The NCUA Board is interested in receiving comments on the proposed
amendments to part 748.
Regulatory Procedures
Regulatory Flexibility Act
The Regulatory Flexibility Act requires NCUA to prepare an analysis
to describe any significant economic impact a proposed rule may have on
a substantial number of small credit unions (those under $10 million in
assets). This proposed rule modifies the language of a preexisting
requirement for federally-insured credit unions to file reports of
suspected crimes and suspicious activity. The proposed rule, therefore,
will not have a significant economic impact on a substantial number of
small credit unions and a regulatory flexibility analysis is not
required.
Paperwork Reduction Act
The Office of Management and Budget assigned 3133-0094 as the
control number for NCUA's Form 2362. NCUA has determined that the
proposed amendments will not increase paperwork requirements and a
paperwork reduction analysis is not required.
Executive Order 13132
Executive Order 13132 encourages independent regulatory agencies to
consider the impact of their actions on state and local interests. In
adherence to fundamental federalism principles, NCUA, an independent
regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies
with the executive order. The proposed rule would not have substantial
direct effects on the states, on the connection between the national
government and the states, or on the distribution of power and
responsibilities among the various levels of government. NCUA has
determined that this proposed rule does not constitute a policy that
has federalism implications for purposes of the executive order.
The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families
NCUA has determined that this proposed rule would not affect family
well-being within the meaning of section 654 of the Treasury and
General Government Appropriations Act, 1999, Pub. L. 105-277, 112 Stat.
2681 (1998).
List of Subjects in 12 CFR Part 748
Credit unions, Suspicious Activity Report.
By the National Credit Union Administration Board on June 22,
2006.
Mary Rupp,
Secretary of the Board.
For the reasons stated in the preamble, the National Credit Union
Administration proposes to amend 12 CFR part 748 as set forth below:
PART 748--SECURITY PROGRAM, REPORT OF SUSPECTED CRIMES, SUSPICIOUS
TRANSACTIONS, CATASTROPHIC ACTS AND BANK SECRECY ACT COMPLIANCE
1. The authority citation for part 748 continues to read as
follows:
Authority: 12 U.S.C. 1766(a) and 1786(q); 31 U.S.C. 5311.
2. Section 748.1(c) is revised to read as follows:
[[Page 36722]]
Sec. 748.1 Filing of reports.
* * * * *
(c) Suspicious Activity Report. A credit union must file a report
of any known or suspected crime or any suspicious transaction related
to money laundering activity or a violation of the Bank Secrecy Act.
For the purposes of this paragraph (c) credit union means a federally-
insured credit union and official means any member of the board of
directors or a volunteer committee.
(1) Reportable activity. Transaction for purposes of this paragraph
means a deposit, withdrawal, transfer between accounts, exchange of
currency, loan, extension of credit, purchase or sale of any stock,
bond, share certificate, or other monetary instrument or investment
security, or any other payment, transfer, or delivery by, through, or
to a financial institution, by whatever means effected. A credit union
must report any known or suspected crime or any suspicious transaction
related to money laundering or other illegal activity, for example,
terrorism financing, loan fraud, or embezzlement, or a violation of the
Bank Secrecy Act by sending a completed suspicious activity report
(SAR) to the Financial Crimes Enforcement Network (FinCEN) in the
following circumstances:
(i) Insider abuse involving any amount. Whenever the credit union
detects any known or suspected federal criminal violations, or pattern
of criminal violations, committed or attempted against the credit union
or involving a transaction or transactions conducted through the credit
union, where the credit union believes it was either an actual or
potential victim of a criminal violation, or series of criminal
violations, or that the credit union was used to facilitate a criminal
transaction, and the credit union has a substantial basis for
identifying one of the credit union's officials, employees, or agents
as having committed or aided in the commission of the criminal
violation, regardless of the amount involved in the violation;
(ii) Transactions aggregating $5,000 or more where a suspect can be
identified. Whenever the credit union detects any known or suspected
federal criminal violation, or pattern of criminal violations,
committed or attempted against the credit union or involving a
transaction or transactions conducted through the credit union, and
involving or aggregating $5,000 or more in funds or other assets, where
the credit union believes it was either an actual or potential victim
of a criminal violation, or series of criminal violations, or that the
credit union was used to facilitate a criminal transaction, and the
credit union has a substantial basis for identifying a possible suspect
or group of suspects. If it is determined before filing this report
that the identified suspect or group of suspects has used an alias,
then information regarding the true identity of the suspect or group of
suspects, as well as alias identifiers, such as drivers' licenses or
social security numbers, addresses and telephone numbers, must be
reported;
(iii) Transactions aggregating $25,000 or more regardless of
potential suspects. Whenever the credit union detects any known or
suspected Federal criminal violation, or pattern of criminal
violations, committed or attempted against the credit union or
involving a transaction or transactions conducted through the credit
union, involving or aggregating $25,000 or more in funds or other
assets, where the credit union believes it was either an actual or
potential victim of a criminal violation, or series of criminal
violations, or that the credit union was used to facilitate a criminal
transaction, even though the credit union has no substantial basis for
identifying a possible suspect or group of suspects; or
(iv) Transactions aggregating $5,000 or more that involve potential
money laundering or violations of the Bank Secrecy Act. Any transaction
conducted or attempted by, at or through the credit union and involving
or aggregating $5,000 or more in funds or other assets, if the credit
union knows, suspects, or has reason to suspect:
(A) The transaction involves funds derived from illegal activities
or is intended or conducted in order to hide or disguise funds or
assets derived from illegal activities (including, without limitation,
the ownership, nature, source, location, or control of such funds or
assets) as part of a plan to violate or evade any federal law or
regulation or to avoid any transaction reporting requirement under
Federal law;
(B) The transaction is designed to evade any regulations
promulgated under the Bank Secrecy Act; or
(C) The transaction has no business or apparent lawful purpose or
is not the sort of transaction in which the particular member would
normally be expected to engage, and the credit union knows of no
reasonable explanation for the transaction after examining the
available facts, including the background and possible purpose of the
transaction.
(v) Exceptions. A credit union is not required to file a SAR for a
robbery or burglary committed or attempted that is reported to
appropriate law enforcement authorities, or for lost, missing,
counterfeit, or stolen securities and the credit union files a report
pursuant to the reporting requirements of 17 CFR 240.17f-1.
(2) Filing Procedures. (i) Timing. A credit union must file a SAR
with FinCEN no later than 30 calendar days from the date the suspicious
activity is initially detected, unless there is no identified suspect
on the date of detection. If no suspect is identified on the date of
detection, a credit union may use an additional 30 calendar days to
identify a suspect before filing a SAR. In no case may a credit union
take more than 60 days from the date it initially detects a reportable
transaction to file a SAR. In situations involving violations requiring
immediate attention, such as ongoing money laundering schemes, a credit
union must immediately notify, by telephone, an appropriate law
enforcement authority and its supervisory authority, in addition to
filing a SAR.
(ii) Content. A credit union must complete, fully and accurately,
SAR form TDF 90-22.47, Suspicious Activity Report (also known as NCUA
Form 2362) in accordance with the form's instructions and 31 CFR part
103.18. A copy of the SAR form may be obtained from the credit union
resources section of NCUA's Web site, https://www.ncua.gov, or the
regulatory section of FinCEN's Web site, https://www.fincen.gov.
(iii) Compliance. Failure to file a SAR as required by the form's
instructions and 31 CFR part 103.18 may subject the credit union, its
officials, employees, and agents to the assessment of civil money
penalties or other administrative actions.
(3) Retention of Records. A credit union must maintain a copy of
any SAR that it files and the original or business record equivalent of
all supporting documentation to the report for a period of five years
from the date of the report. Supporting documentation must be
identified and maintained by the credit union as such. Supporting
documentation is considered a part of the filed report even though it
should not be actually filed with the submitted report. A credit union
must make all supporting documentation available to appropriate law
enforcement authorities and its regulatory supervisory authority upon
request.
(4) Notification to board of directors. (i) Generally. The
management of the credit union must promptly notify its board of
directors, or a committee designated by the board of directors to
receive such notice, of any SAR filed.
(ii) Suspect is a director or committee member. If a credit union
files a SAR
[[Page 36723]]
and the suspect is a director or member of a committee designated by
the board of directors to receive notice of SAR filings, the credit
union may not notify the suspect, pursuant to 31 U.S.C. 5318(g)(2), but
must notify all directors who are not suspects.
(5) Confidentiality of reports. SARs are confidential. Any credit
union, including its officials, employees, and agents, subpoenaed or
otherwise requested to disclose a SAR or the information in a SAR must
decline to produce the SAR or to provide any information that would
disclose that a SAR was prepared or filed, citing this part, applicable
law , for example, 31 U.S.C. 5318(g), or both, and notify NCUA of the
request.
(6) Safe Harbor. Any credit union, including its officials,
employees, and agents, that makes a report of suspected or known
criminal violations and suspicious activities to law enforcement and
financial institution supervisory authorities, including supporting
documentation, are protected from liability for any disclosure in the
report, or for failure to disclose the existence of the report, or
both, to the full extent provided by 31 U.S.C. 5318(g)(3). This
protection applies if the report is filed pursuant to this part or is
filed on a voluntary basis.
[FR Doc. E6-10136 Filed 6-27-06; 8:45 am]
BILLING CODE 7535-01-P
