Exemptions to Suspicious Activity Report Requirements

Published date22 January 2021
Citation86 FR 6572
Record Number2021-00034
SectionProposed rules
CourtThe Comptroller Of The Currency Office
This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
Proposed Rules Federal Register
6572
Vol. 86, No. 13
Friday, January 22, 2021
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Parts 21 and 163
[Docket No. OCC–2020–0037]
RIN 1557–AE77
Exemptions to Suspicious Activity
Report Requirements
AGENCY
: Office of the Comptroller of the
Currency (OCC), Treasury (USDT).
ACTION
: Notice of proposed rulemaking
with request for public comment.
SUMMARY
: The OCC is inviting comment
on a proposed rule that would modify
the requirements for national banks and
federal savings associations to file
Suspicious Activity Reports. The
proposed rule would amend the OCC’s
Suspicious Activity Report regulations
to allow the OCC to issue exemptions
from the requirements of those
regulations. The proposed rule makes it
possible for the OCC to grant relief to
national banks or federal savings
associations that develop innovative
solutions intended to meet Bank
Secrecy Act requirements more
efficiently and effectively.
DATES
: Comments must be received by
February 22, 2021.
ADDRESSES
: Commenters are encouraged
to submit comments through the Federal
eRulemaking Portal, if possible. Please
use the title ‘‘Exemptions to Suspicious
Activity Report Requirements’’ to
facilitate the organization and
distribution of the comments. You may
submit comments by any of the
following methods:
Federal eRulemaking Portal—
Regulations.gov Classic or
Regulations.gov Beta:
Regulations.gov Classic: Go to https://
www.regulations.gov/. Enter ‘‘Docket ID
OCC–2020–0037’’ in the Search Box and
click ‘‘Search.’’ Click on ‘‘Comment
Now’’ to submit public comments. For
help with submitting effective
comments please click on ‘‘View
Commenter’s Checklist.’’ Click on the
‘‘Help’’ tab on the Regulations.gov home
page to get information on using
Regulations.gov, including instructions
for submitting public comments.
Regulations.gov Beta: Go to https://
beta.regulations.gov/ or click ‘‘Visit
New Regulations.gov Site’’ from the
Regulations.gov Classic homepage.
Enter ‘‘Docket ID OCC–2020–0037’’ in
the Search Box and click ‘‘Search.’’
Public comments can be submitted via
the ‘‘Comment’’ box below the
displayed document information or by
clicking on the document title and then
clicking the ‘‘Comment’’ box on the top-
left side of the screen. For help with
submitting effective comments please
click on ‘‘Commenter’s Checklist.’’ For
assistance with the Regulations.gov Beta
site, please call (877) 378–5457 (toll
free) or (703) 454–9859 Monday–Friday,
9 a.m.–5 p.m. ET or email regulations@
erulemakinghelpdesk.com.
Mail: Chief Counsel’s Office,
Attention: Comment Processing, Office
of the Comptroller of the Currency, 400
7th Street SW, Suite 3E–218,
Washington, DC 20219.
Hand Delivery/Courier: 400 7th
Street SW, Suite 3E–218, Washington,
DC 20219.
Instructions: You must include
‘‘OCC’’ as the agency name and ‘‘Docket
ID OCC–2020–0037’’ in your comment.
In general, the OCC will enter all
comments received into the docket and
publish the comments on the
Regulations.gov website without
change, including any business or
personal information provided such as
name and address information, email
addresses, or phone numbers.
Comments received, including
attachments and other supporting
materials, are part of the public record
and subject to public disclosure. Do not
include any information in your
comment or supporting materials that
you consider confidential or
inappropriate for public disclosure.
You may review comments and other
related materials that pertain to this
rulemaking action by the following
methods:
Viewing Comments Electronically—
Regulations.gov Classic or
Regulations.gov Beta:
Regulations.gov Classic: Go to https://
www.regulations.gov/. Enter ‘‘Docket ID
OCC–2020–0037’’ in the Search box and
click ‘‘Search.’’ Click on ‘‘Open Docket
Folder’’ on the right side of the screen.
Comments and supporting materials can
be viewed and filtered by clicking on
‘‘View all documents and comments in
this docket’’ and then using the filtering
tools on the left side of the screen. Click
on the ‘‘Help’’ tab on the
Regulations.gov home page to get
information on using Regulations.gov.
The docket may be viewed after the
close of the comment period in the same
manner as during the comment period.
Regulations.gov Beta: Go to https://
beta.regulations.gov/ or click ‘‘Visit
New Regulations.gov Site’’ from the
Regulations.gov Classic homepage.
Enter ‘‘Docket ID OCC–2020–0037’’ in
the Search Box and click ‘‘Search.’’
Click on the ‘‘Comments’’ tab.
Comments can be viewed and filtered
by clicking on the ‘‘Sort By’’ drop-down
on the right side of the screen or the
‘‘Refine Results’’ options on the left side
of the screen. Supporting materials can
be viewed by clicking on the
‘‘Documents’’ tab and filtered by
clicking on the ‘‘Sort By’’ drop-down on
the right side of the screen or the
‘‘Refine Results’’ options on the left side
of the screen.’’ For assistance with the
Regulations.gov Beta site, please call
(877) 378–5457 (toll free) or (703) 454–
9859 Monday–Friday, 9 a.m.–5 p.m. ET
or email regulations@
erulemakinghelpdesk.com.
The docket may be viewed after the
close of the comment period in the same
manner as during the comment period.
FOR FURTHER INFORMATION CONTACT
: Jim
Vivenzio, Senior Counsel; Jina Cheon,
Counsel; Henry Barkhausen, Counsel; or
Scott Burnett, Counsel, Chief Counsel’s
Office (202) 649–5490; Office of the
Comptroller of the Currency, 400 7th
Street SW, Washington, DC 20219.
SUPPLEMENTARY INFORMATION
:
I. Introduction
OCC regulations require national
banks and federal savings associations
to file Suspicious Activity Reports
(SARs) under certain conditions. These
regulations also provide for: (i) Board of
director notification; (ii) filing
exceptions; (iii) SAR confidentiality; (iv)
recordkeeping requirements; (v)
supporting documentation
requirements; and (vi) limitations on
liability. Requirements related to SARs
are codified at 12 CFR 21.11 for national
banks and 12 CFR 163.180 for federal
savings associations. This proposed rule
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1
The OCC first codified this requirement in 1971
at 12 CFR 7.5225, which required national banks to
submit a report to the OCC, the FBI, the U.S.
attorney for the bank’s district, and the bank’s
bonding company consisting of ‘‘any state of facts
growing out of the affairs of the bank known or
suspected to involve criminal violation of any other
section of the United States Code.’’ 36 FR 17000,
17012 (Aug. 26, 1971). In 1986, the OCC repealed
12 CFR 7.5225 and adopted its criminal referral
form regulation, 12 CFR 21.11, which required
national banks to report specified suspicious
transactions on a standardized criminal referral
form. 51 FR 25866 (July 17, 1986). As explained
below, the OCC revised 12 CFR 21.11 in the 1990s
to conform to the new SAR reporting form and
system.
2
54 FR 25839 (June 20, 1989).
3
Public Law 102–550, 106 Stat. 3672 (1992).
4
31 U.S.C. 5318(g)(1). The quoted text is from
section 1517 of the Annunzio-Wylie Anti-Money
Laundering Act, which was originally codified at 31
U.S.C. 5314(g). The text was moved as part of the
Violent Crime Control and Law Enforcement Act of
1994.
5
61 FR 4326 (Feb. 5, 1996). Prior to the adoption
of FinCEN’s SAR regulation in 1996 and the
accompanying revisions to the OCC’s regulation,
the OCC’s criminal referral regulation did not have
a specific provision that required the reporting of
money laundering transactions. However, the
criminal referral regulation broadly encompassed
money laundering and structuring transactions as
explained in the Supplementary Information
section to the final rule enhancing the criminal
referral process. 54 FR 25839, 25840 (June 20,
1989).
6
61 FR 4332 (Feb. 5, 1996) (OCC).
7
See 12 CFR 21.11(c)(4); 163.180(d)(3)(iv); 31
CFR 1020.320(a)(2).
8
12 CFR 208.62 (Board of Governors of the
Federal Reserve); 12 CFR 390.353 (Federal Deposit
Insurance Corporation); 12 CFR 748.1 (National
Credit Union Administration).
9
See 31 U.S.C. 5318(a)(7), with implementing
regulations at 31 CFR 1010.970.
10
31 CFR 1010.970(a).
would amend those sections to allow
the OCC to issue exemptions from the
regulations’ SAR requirements.
II. Background
The OCC has long required its
regulated institutions to report potential
violations of law arising from
transactions that flow through those
institutions.
1
The OCC required such
reporting because fraud, abusive insider
transactions, check-kiting schemes,
money laundering, and other financial
crimes can pose serious threats to a
financial institution’s continued
viability and, if unchecked, can
undermine the public confidence in the
nation’s financial system generally.
2
In 1992 Congress passed the
Annunzio-Wylie Anti-Money
Laundering Act, which redesigned the
criminal referral process applicable to
OCC supervised entities and made the
reporting of certain suspicious
transactions a requirement of the Bank
Secrecy Act (BSA).
3
The Act permitted
the Department of the Treasury to
require financial institutions, including
national banks and federal savings
associations, to ‘‘report any suspicious
transaction relevant to a possible
violation of law or regulation.’’
4
As a
result, the Department of the Treasury,
in consultation with the OCC, the other
federal banking agencies, and law
enforcement, developed the modern
SAR form and reporting process, which
standardized the reporting forms and
created a centralized database that could
be accessed by multiple law
enforcement and regulatory agencies.
To implement this new reporting
system, the Financial Crimes
Enforcement Network of the Department
of the Treasury (FinCEN) issued its
implementing SAR regulations in 1996
for financial institutions subject to the
requirements of the BSA to, among
other things, specifically address the
reporting of money laundering
transactions and transactions designed
to evade the reporting requirements of
the BSA.
5
To further implement this
new reporting process and reduce
unnecessary reporting burdens, the OCC
and the other federal banking agencies
contemporaneously amended their
criminal referral form regulations to
incorporate the new SAR form and
reporting database, align their regulatory
reporting requirements with FinCEN’s
BSA reporting requirements, and further
refine the reporting processes.
6
As a result of this redesign and
FinCEN’s implementing regulations,
national banks and federal savings
associations are currently required to
file SARs under both OCC and FinCEN
regulations. These regulations are not
identical but are substantially similar
with regard to the specified BSA
reporting obligations required by
FinCEN. Both the OCC’s and FinCEN’s
SAR regulations require banks to file
SARs relating to money laundering,
transactions that are designed to evade
the reporting requirements of the BSA,
and transactions that have no business
or apparent lawful purpose or are not
the sort in which the particular
customer would normally be expected
to engage, and the bank knows of no
reasonable explanation for the
transactions after examining the
available facts, including the
background and possible purpose of the
transactions.
7
Furthermore, with respect
to the SAR confidentiality requirements
in the BSA, both the OCC’s and
FinCEN’s SAR regulations require banks
to maintain the confidentiality of a SAR
and any information that would reveal
the existence of the SAR, outside of
certain circumstances.
While the OCC and FinCEN
regulations contain substantively
similar requirements, including
requiring reporting in certain common
contexts and requiring institutions to
maintain the confidentiality of SARs,
the OCC and the other federal banking
agencies require reporting in broader
circumstances (e.g., insider abuse at any
dollar amount).
8
As previously noted,
these violations and abuse situations
can pose serious threats to financial
institutions’ continued viability and, if
unchecked, can undermine the public
confidence in the nation’s financial
industry.
The OCC and FinCEN SAR
regulations also provide: (i) That SARs
are not required for a robbery or
burglary committed or attempted that is
reported to appropriate law enforcement
authorities; (ii) that SARs are
confidential and shall not be disclosed
except as authorized; (iii) recordkeeping
requirements for SARs and supporting
documentation; (iv) that supporting
documentation shall be deemed to have
been filed with the SAR; and (v) that
supporting documentation shall be
made available to appropriate law
enforcement agencies upon request. The
regulations also provide a limitation on
liability to any national bank, federal
savings association or other financial
institution and any director, officer,
employee, or agent of a national bank or
federal savings association or other
financial institution that makes a
voluntary disclosure of any possible
violation of law or regulation to a
government agency or files a SAR
pursuant to the regulations or any other
authority. The OCC’s regulations also
contain a provision requiring that
national banks and federal savings
associations promptly notify their board
of directors when a SAR has been filed.
While neither the OCC’s SAR
regulations nor FinCEN’s SAR reporting
regulation contain provisions permitting
exemptions, FinCEN has general
authority to grant exemptions from the
requirements of the BSA, which
includes granting exemptions under its
SAR reporting regulations.
9
FinCEN’s
regulation provides that ‘‘[t]he Secretary
[of Treasury], in his sole discretion, may
by written order or authorization make
exceptions to or grant exemptions from
the requirements of [the BSA]. Such
exceptions or exemptions may be
conditional or unconditional, may apply
to particular persons or to classes of
persons, and may apply to transactions
or classes of transactions.’’
10
The
Secretary has delegated this exemption
authority to FinCEN.
This disparity in exemption authority
makes it more difficult for the OCC to
grant relief if a national bank or federal
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11
Joint Statement on Innovative Efforts to Combat
Money Laundering and Terrorist Financing (Dec. 3,
2018), available at https://www.occ.gov/news-
issuances/news-releases/2018/nr-occ-2018-
130a.pdf.
12
Public Law 106–102, sec. 722, 113 Stat. 1338,
1471 (1999).
savings association has a novel SAR
filing proposal that does not squarely fit
within the regulatory requirements but
would nonetheless be beneficial from an
anti-money laundering regulatory and
safety and soundness perspective. As
financial technology and innovation
continue to develop in the area of
monitoring and reporting financial
crime and terrorist financing, the OCC
will need the express regulatory
flexibility to grant exemptive relief
when appropriate in this area on a
consistent basis. In 2018 the OCC, the
Board of Governors of the Federal
Reserve System, the Federal Deposit
Insurance Corporation, FinCEN, and the
National Credit Union Administration
issued a statement encouraging banks to
take innovative approaches to meet their
BSA/anti-money laundering (BSA/AML)
compliance obligations.
11
That
statement explained that banks are
encouraged to consider, evaluate, and,
where appropriate, responsibly
implement innovative approaches in
this area. Today, innovative approaches
and technological developments in the
areas of SAR monitoring, investigation,
and filings may involve, among other
things: (i) Automated form population
using natural language processing,
transaction data, and customer due
diligence information; (ii) automated or
limited investigation processes
depending on the complexity and risk of
a particular transaction and appropriate
safeguards; and (iii) enhanced
monitoring processes using more and
better data, optical scanning, artificial
intelligence, or machine learning
capabilities. Requests for exemptive
relief pertaining to innovation or other
matters may involve, among other
things, expanded investigations and
SAR timing issues, SAR disclosures and
sharing, continued SAR filings for
ongoing activity, outsourcing of SAR
processes, the role of agents of national
banks and federal savings associations,
the use of shared utilities and shared
data, and the use and sharing of de-
identified data. OCC expects that new
technologies will continue to prompt
additional innovative approaches
related to SAR filing and monitoring.
III. The Proposal
The proposed rule would allow the
OCC to issue exemptions from the
requirements of its SAR regulations.
Specifically, the proposed rule would
add a provision to 12 CFR 21.11 and 12
CFR 163.180 that would provide that
the OCC may exempt a national bank or
federal savings association from the
requirements of those sections.
As discussed above, the OCC’s SAR
regulations contains some requirements
that are not included in FinCEN’s SAR
regulation. For exemption requests
involving these OCC additional SAR
requirements, a national bank or federal
savings association would only need to
seek an exemption from the OCC. The
OCC believes that the proposed process
is consistent with the purposes of the
BSA and with safe and sound banking.
For exemption requests from the
requirements of the OCC’s SAR
regulations that would also require an
exemption from FinCEN’s SAR
regulation, for example, exemption
requests related to SAR filings required
by 12 CFR 21.11(c)(4), or related to SAR
timing requirements in 12 CFR 21.11(d),
or related to SAR confidentiality in 12
CFR 21.11(k), a national bank would
need to seek an exemption from both
the OCC and FinCEN.
Under the proposed rule, a national
bank requesting an exemption from the
requirements of 12 CFR 21.11, including
exemptions related to SAR filings solely
required by paragraphs (c)(1) through
(3), must submit a request in writing to
the OCC. In reviewing such requests, the
OCC would consider whether the
exemption is consistent with safe and
sound banking, and any other
appropriate factors, such as any
outstanding supervisory concerns
related to BSA/AML, including informal
and formal enforcement actions.
A national bank or federal savings
association requesting an exemption
from the requirements of the OCC’s SAR
regulations that would also require an
exemption from FinCEN’s SAR
regulation, for example, an exemption
request related to SAR filings under 12
CFR 21.11(c)(4) for national banks,
would have to submit a request in
writing to both the OCC and to FinCEN
for approval. Upon receiving a written
request from a national bank or federal
savings association, the OCC would
consider whether the exemption is
consistent with the purposes of the
Bank Secrecy Act, with safe and sound
banking, and any other appropriate
factors, such as any outstanding
supervisory concerns related to BSA/
AML, including informal and formal
enforcement actions. With respect to
requests for exemption from the
requirements of the OCC’s SAR
regulations that would also require an
exemption from FinCEN’s SAR
regulation, the requestor would have to
obtain exemptions from both agencies.
The OCC also may notify the other
federal banking agencies and consider
their comments before granting any
exemption. Such exemptions may be
conditional or unconditional, may apply
to particular persons or to classes of
persons, and may apply to transactions
or classes of transactions. In addition,
the proposed rule provides that the OCC
may grant an exemption for a specified
time period.
Under the proposed rule, the OCC
could also revoke previously granted
exemptions if circumstances change
related to the factors set out above (e.g.,
consistency with the BSA and safety
and soundness) or any imposed
conditions. The OCC invites comments
on the proposed rule, including whether
any additional detail relating to the
procedures that would be followed in
considering, granting, or revoking
exemptions is necessary. The OCC
welcomes comments on any aspect of
the proposed rule, in particular, with
regard to whether additional or different
factors or standards should be applied
in the determination whether to grant an
exemption request, as well as the form
and manner of the OCC’s response to an
exemption request.
IV. Administrative Law Matters
A. Solicitation of Comments and Use of
Plain Language
Section 722 of the Gramm-Leach-
Bliley Act
12
requires the federal
banking agencies to use plain language
in all proposed and final rules
published after January 1, 2000. The
OCC has sought to present the proposed
rule in a simple and straightforward
manner, and invite comment on the use
of plain language. For example:
Has the OCC organized the material
to suit your needs? If not, how could the
OCC present the proposed rule more
clearly?
Are the requirements in the
proposed rule clearly stated? If not, how
could the proposed rule be more clearly
stated?
Do the regulations contain technical
language or jargon that is not clear? If
so, which language requires
clarification?
Would a different format (grouping
and order of sections, use of headings,
paragraphing) make the regulation
easier to understand? If so, what
changes would achieve that?
Would more, but shorter, sections
be better? If so, which sections should
be changed?
What other changes can the OCC
incorporate to make the regulation
easier to understand?
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The OCC calculated the number of small
entities using the SBA’s size thresholds for
commercial banks and savings institutions, and
trust companies, which are $550 million and $38.5
million, respectively. Consistent with the General
Principles of Affiliation, 13 CFR 121.103(a), the
OCC counted the assets of affiliated financial
institutions when determining whether to classify
a national bank or federal savings association as a
small entity.
14
12 U.S.C. 4802(a).
15
12 U.S.C. 4802(b).
B. Paperwork Reduction Act Analysis
Certain provisions of the proposal
contain ‘‘collection of information’’
requirements within the meaning of the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501–3521) (PRA). In accordance
with the requirements of the PRA,
agencies may not conduct or sponsor,
and a respondent is not required to
respond to, an information collection
unless it displays a currently valid
Office of Management and Budget
(OMB) control number. The OCC
reviewed the proposed rulemaking and
determined that it revises information
collection requirements previously
approved by OMB under OMB Control
No. 1557–0180. The OCC has submitted
the revised information collection to
OMB for review under section 3507(d)
of the PRA (44 U.S.C. 3507(d)) and
§ 1320.11 of the OMB’s implementing
regulations (5 CFR part 1320).
Current Actions. The proposal would
revise 12 CFR 21.11 and 12 CFR 163.180
to allow national banks and federal
savings associations to submit written
requests for exemptions from the
requirements of the OCC’s SAR
regulations. The burden estimates below
are based on the estimated number of
banks and savings associations that
might request such exemptions each
year and the estimated number of hours
required to submit such a request.
National banks and federal savings
associations may submit written
requests for exemptions from the
requirements of the OCC’s SAR
regulations. 12 CFR 21.11(m) and
163.180(f).
Title of Information Collection:
Minimum Security Devices and
Procedures, Reports of Suspicious
Activities, and Bank Secrecy Act
Compliance Program.
Frequency: Event generated.
Affected Public: Businesses or other
for-profit.
Estimated number of respondents: 5.
Total estimated annual burden: 250
hours.
Comments are invited on:
a. Whether the collections of
information are necessary for the proper
performance of the agencies’ functions,
including whether the information has
practical utility;
b. The accuracy or the estimate of the
burden of the information collections,
including the validity of the
methodology and assumptions used;
c. Ways to enhance the quality,
utility, and clarity of the information to
be collected;
d. Ways to minimize the burden of the
information collections on respondents,
including through the use of automated
collection techniques or other forms of
information technology; and
e. Estimates of capital or startup costs
and costs of operation, maintenance,
and purchase of services to provide
information.
All comments will become a matter of
public record. Comments on aspects of
this document that may affect reporting,
recordkeeping, or disclosure
requirements and burden estimates
should be sent to the addresses listed in
the
ADDRESSES
section of this document.
A copy of the comments may also be
submitted to the OMB desk officer for
the agencies by mail to U.S. Office of
Management and Budget, 725 17th
Street NW, #10235, Washington, DC
20503; facsimile to (202) 395–6974; or
email to oira_submission@omb.eop.gov,
Attention, Federal Banking Board Desk
Officer.
C. Regulatory Flexibility Act Analysis
The Regulatory Flexibility Act, 5
U.S.C. 601 et seq., (RFA), requires an
agency, in connection with a proposed
rule, to prepare an Initial Regulatory
Flexibility Analysis describing the
impact of the rule on small entities
(defined by the SBA for purposes of the
RFA to include commercial banks and
savings institutions with total
consolidated assets of $600 million or
less and trust companies with total
consolidated assets of $41.5 million of
less) or to certify that the proposed rule
would not have a significant economic
impact on a substantial number of small
entities.
As part of our analysis, we consider
whether the proposal would have a
significant economic impact on a
substantial number of small entities,
pursuant to the RFA. The OCC currently
supervises approximately 745 small
entities.
13
Because the proposal imposes
no new mandates, it would have only de
minimis costs to OCC-supervised small
entities. Therefore, the OCC certifies
that the proposal would not have a
significant economic impact on a
substantial number of small entities.
D. Riegle Community Development and
Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the
Riegle Community Development and
Regulatory Improvement Act (RCDRIA),
in determining the effective date and
administrative compliance requirements
for new regulations that impose
additional reporting, disclosure, or other
requirements on insured depository
institutions, each federal banking
agency must consider, consistent with
principles of safety and soundness and
the public interest, any administrative
burdens that such regulations would
place on insured depository institutions,
including small depository institutions,
and customers of depository
institutions, as well as the benefits of
such regulations.
14
In addition, section
302(b) of RCDRIA requires new
regulations and amendments to
regulations that impose additional
reporting, disclosures, or other new
requirements on insured depository
institutions generally to take effect on
the first day of a calendar quarter that
begins on or after the date on which the
regulations are published in final
form.
15
The OCC requests comment on
any administrative burdens that the
proposed rule would place on
depository institutions, including small
depository institutions, and their
customers, and the benefits of the
proposed rule that the OCC should
consider in determining the effective
date and administrative compliance
requirements for a final rule
E. OCC Unfunded Mandates Reform Act
of 1995 Determination
Consistent with the Unfunded
Mandates Reform Act of 1995 (UMRA),
2 U.S.C. 1532, the OCC considers
whether the proposed rule includes a
Federal mandate that may result in the
expenditure by state, local, and tribal
governments, in the aggregate, or by the
private sector, of $100 million adjusted
for inflation (currently $157 million) in
any one year. The proposed rule does
not impose new mandates. Therefore,
the OCC concludes that implementation
of the proposed rule would not result in
an expenditure of $157 million or more
annually by state, local, and tribal
governments, or by the private sector.
List of Subjects
12 CFR Part 21
Crime, Currency, National banks,
Reporting and recordkeeping
requirements, Security measures.
12 CFR Part 163
Accounting, Administrative practice
and procedure, Advertising, Crime,
Currency, Investments, Mortgages,
Reporting and recordkeeping
requirements, Savings associations.
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6576
Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Proposed Rules
Authority and Issuance
For the reasons stated in the
SUPPLEMENTARY INFORMATION
, the OCC
proposes to amend 12 CFR parts 21 and
163 as follows:
PART 21—MINIMUM SECURITY
DEVICES AND PROCEDURES,
REPORTS OF SUSPICIOUS
ACTIVITIES, AND BANK SECRECY
ACT COMPLIANCE PROGRAM
1. The authority citation for part 21 is
revised to read as follows:
Authority: 12 U.S.C. 1, 93a, 161, 1462a,
1463, 1464, 1818, 1881–1884, and 3401–
3422.
2. In § 21.11, add paragraph (m) to
read as follows:
§ 21.11 Suspicious Activity Report.
* * * * *
(m) Exemptions. (1) The OCC may
exempt any national bank from the
requirements of this section. A national
bank requesting an exemption must
submit a request in writing to the OCC.
In reviewing such requests, the OCC
will consider whether the exemption is
consistent with safe and sound banking
and may consider other appropriate
factors. An exemption shall be
applicable only as expressly stated in
the exemption, may be conditional or
unconditional, may apply to particular
persons or to classes of persons, and
may apply to transactions or classes of
transactions. A national bank requesting
an exemption that also requires an
exemption from the requirements of
FinCEN’s SAR regulation must submit a
request in writing to both the OCC and
FinCEN for approval. In reviewing such
requests, the OCC will consider whether
the exemption is consistent with the
purposes of the Bank Secrecy Act, with
safe and sound banking, and any other
appropriate factors.
(2) The OCC will provide a written
response to the national bank that
submitted the exemption request. A
national bank that has received an
exemption under paragraph (m)(1) of
this section may rely on the exemption
for a period of time to be communicated
by the OCC in its granting of the
exemption.
(3) The OCC may extend the period of
time or may revoke an exemption
granted under paragraph (m)(1) of this
section. Exemptions may be revoked at
the sole discretion of the OCC. The OCC
will provide written notice to the
national bank of the OCC’s intention to
revoke an exemption. Such notice will
include the basis for the revocation and
will provide an opportunity for the
national bank to submit a response to
the OCC. The OCC will consider the
response prior to deciding whether to
revoke an exemption and will notify the
national bank of the OCC’s decision to
revoke an exemption in writing.
(4) With respect to requests for
exemption that will also require an
exemption from the requirements of
FinCEN’s SAR regulation, upon
receiving approval from both the OCC
and FinCEN, the requestor shall be
relieved of its obligations under this
section to the extent stated in such
approvals.
PART 163—SAVINGS
ASSOCIATIONS—OPERATIONS
3. The authority citation for part 163
is revised to read as follows:
Authority: 12 U.S.C. 161, 1462a, 1463,
1464, 1467a, 1817, 1820, 1828, 1831o, 3806,
5101 et seq., 5412(b)(2)(B); 42 U.S.C. 4106.
2. In § 163.180, add paragraph (f) to
read as follows:
§ 163.180 Suspicious Activity Reports and
other reports and statements.
* * * * *
(f) Exemptions. (1) The OCC may
exempt any savings association or
service corporation from the
requirements of this section. A savings
association or service corporation
requesting an exemption from the
provisions of this section, must submit
a request in writing to the OCC. In
reviewing such requests, the OCC will
consider whether the exemption is
consistent with safe and sound banking,
and may consider other appropriate
factors. An exemption shall be
applicable only as expressly stated in
the exemption, may be conditional or
unconditional, may apply to particular
persons or to classes of persons, and
may apply to transactions or classes of
transactions. A federal savings
association requesting an exemption
that also requires an exemption from the
requirements of FinCEN’s SAR
regulation must submit a request in
writing to both the OCC and FinCEN for
approval. In reviewing such requests,
the OCC will consider whether the
exemption is consistent with the
purposes of the Bank Secrecy Act, with
safe and sound banking, and any other
appropriate factors.
(2) The OCC will provide a written
response to the savings association or
service corporation that submitted the
exemption request. A savings
association or service corporation that
has received an exemption under
paragraph (f)(1) of this section may rely
on the exemption for a period of time
to be communicated by the OCC in its
granting of the exemption.
(3) The OCC may extend the period of
time or may revoke an exemption
granted under paragraph (f)(1) of this
section. Exemptions may be revoked at
the sole discretion of the OCC. The OCC
will provide written notice to the
savings association or service
corporation of the OCC’s intention to
revoke an exemption. Such notice will
include the basis for the revocation and
will provide an opportunity for the
savings association or service
corporation to submit a response to the
OCC. The OCC will consider the
response prior to deciding whether to
revoke an exemption and will notify the
savings association or service
corporation of the OCC’s decision to
revoke an exemption in writing.
(4) With respect to requests for
exemption that will also require an
exemption from the requirements of
FinCEN’s SAR regulation, upon
receiving approval from both the OCC
and FinCEN, the requestor shall be
relieved of its obligations under this
section to the extent stated in such
approvals.
Brian P. Brooks,
Acting Comptroller of the Currency.
[FR Doc. 2021–00034 Filed 1–21–21; 8:45 am]
BILLING CODE 4810–33–P
FEDERAL RESERVE SYSTEM
12 CFR Part 208
[Docket No. R–1738]
RIN 7100–AG08
Membership of State Banking
Institutions in the Federal Reserve
System; Reports of Suspicious
Activities Under Bank Secrecy Act
AGENCY
: Board of Governors of the
Federal Reserve System (Board).
ACTION
: Notice of proposed rulemaking
with request for public comment.
SUMMARY
: The Board is inviting
comment on a proposed rule that would
modify the requirements to file
Suspicious Activity Reports for state
member banks, Edge and agreement
corporations, U.S. offices of foreign
banking organizations supervised by the
Federal Reserve, and bank holding
companies and their nonbank
subsidiaries. Specifically, the proposed
rule would amend the Board’s
Suspicious Activity Report regulations
to provide for the issuance of
exemptions from the requirements of
those regulations, in full or in part. The
proposed rule is intended, among other
things, to facilitate supervised
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