75586 Federal Register / Vol. 75, No. 232 / Friday, December 3, 2010 / Rules and Regulations 

1The Annunzio-Wylie Anti-Money Laundering 

Act of 1992 (the Annunzio-Wylie Act) amended the 

BSA and authorized the Secretary of the Treasury 

to require financial institutions to report suspicious 

transactions relevant to a possible violation of law 

or regulation. See Pub. L. 102–550, Title XV, section 

1517(b), 106 Stat. 4055, 4058–9 (1992); 31 U.S.C. 

5318(g)(1). The OTS, Board of Governors of the 

Federal Reserve System (FRB), Federal Deposit 

Insurance Corporation (FDIC), Office of the 

Comptroller of the Currency (OCC), and National 

Credit Union Administration (NCUA), (collectively 

referred to as the Federal bank regulatory agencies) 

subsequently issued virtually identical 

implementing regulations on suspicious activity 

reporting. See 12 CFR 21.11 (OCC); 12 CFR 208.62 

(FRB); 12 CFR 353.3 (FDIC); 12 CFR 563.180 (OTS); 

and 12 CFR 748.1 (NCUA). 

2 31 U.S.C. 5318(g)(2)(A)(i). 

3FinCEN is the agency designated by the 

Department of the Treasury to administer the BSA, 

and with which SARs must be filed. See 31 U.S.C. 

5318; 12 CFR 21.11(c). 

4See, e.g., 31 CFR 103.18(e) (SAR confidentiality 

rule for banks); 31 CFR 103.19(e) (SAR 

confidentiality rule for brokers or dealers in 

securities). 

5See 12 CFR 21.11(k) (OCC); 12 CFR 208.62(j) 

(FRB); 12 CFR 353.3(g) (FDIC); 12 CFR 

563.180(d)(12) (OTS); and 12 CFR 748.1 (NCUA). 

6 31 U.S.C. 5318(q)(3). 

7See USA PATRIOT Act, section 351(b), Pub. L. 

107–56, Title III, section 351, 115 Stat. 272, 321 

(2001); 31 U.S.C. 5318(g)(2). 

Authority: 12 U.S.C. 1462a, 1463, 1464; 

Pub.L. 101–410, 104 Stat 890; Pub.L. 104– 

134, 110 Stat 1321–358. 

■ 2. Amend § 510.5 by: 

■ a. Removing, at the end of paragraph 

(a)(3)(ii), the word ‘‘and’’; 

■ b. Removing, at the end of paragraph 

(a)(3)(iii), the period and adding ‘‘; and’’ 

in its place; 

■ c. Adding paragraph (a)(3)(iv) to read 

as set forth below; 

■ d. Removing, at the end of paragraph 

(d)(4)(i)(C), the word ‘‘or’’; 

■ e. Removing, at the end of paragraph 

(d)(4)(i)(D) the period and adding ‘‘; and’’ 

in its place; and 

■ f. Adding paragraph (d)(4)(i)(E) as set 

forth below. 

§ 510.5 Release of unpublished OTS 

information. 

(a) * * * 

(3) * * * 

(iv) Requests for a Suspicious Activity 

Report (SAR), or any information that 

would reveal the existence of a SAR. 

* * * * * 

(d) * * * 

(4) * * * 

(i) * * * 

(E) Information that should not be 

disclosed, because such disclosure is 

prohibited by law. 

* * * * * 

Dated: June 1, 2010. 

By the Office of Thrift Supervision. 

John E. Bowman, 

Acting Director. 

[FR Doc. 2010–29871 Filed 12–2–10; 8:45 am] 

BILLING CODE 6720–01–P 

DEPARTMENT OF THE TREASURY 

Office of Thrift Supervision 

12 CFR Part 563 

[Docket ID OTS–2010–0015] 

RIN 1550–AC26 

Confidentiality of Suspicious Activity 

Reports 

AGENCY: The Office of Thrift 

Supervision, Treasury (OTS). 

ACTION: Final rule. 

SUMMARY: The OTS is issuing this final 

rule to amend its regulations 

implementing the Bank Secrecy Act 

(BSA) governing the confidentiality of a 

suspicious activity report (SAR) to: 

Clarify the scope of the statutory 

prohibition on the disclosure by a 

financial institution of a SAR, as it 

applies to savings associations and 

service corporations; address the 

statutory prohibition on the disclosure 

by the government of a SAR, as that 

prohibition applies to the OTS’s 

standards governing the disclosure of 

SARs; clarify that the exclusive standard 

applicable to the disclosure of a SAR, or 

any information that would reveal the 

existence of a SAR, by the OTS is to 

fulfill official duties consistent with the 

purposes of the BSA; and modify the 

safe harbor provision in the OTS’s SAR 

rules to include changes made by the 

Uniting and Strengthening America by 

Providing Appropriate Tools Required 

to Intercept and Obstruct Terrorism 

(USA PATRIOT) Act. These 

amendments are consistent with a final 

rule being contemporaneously issued by 

the Financial Crimes Enforcement 

Network (FinCEN) and the Office of 

Comptroller of the Currency (OCC). 

DATES: This rule is effective on January 

3, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Marvin Shaw, Senior Attorney, 

Regulations and Legislation (202–906– 

6639); Noelle Kurtin, Senior Attorney, 

Enforcement (202–906–6739); or Stacy 

Messett, Senior Project Manager, BSA 

and Compliance Examinations (202– 

906–6241); Office of Thrift Supervision, 

1700 G Street, NW., Washington, DC 

20552. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The BSA requires financial 

institutions, including savings 

associations and service corporations 

regulated by the OTS, to keep certain 

records and make certain reports that 

have been determined to be useful in 

criminal, tax, or regulatory 

investigations or proceedings, and for 

intelligence or counter intelligence 

activities to protect against international 

terrorism. In particular, the BSA and its 

implementing regulations require a 

financial institution to file a SAR when 

it detects a known or suspected 

violation of Federal law or a suspicious 

activity related to money laundering, 

terrorist financing, or other criminal 

activity.1

SARs are used for law enforcement or 

regulatory purposes to combat terrorism, 

terrorist financing, money laundering 

and other financial crimes. For this 

reason, the BSA provides that a 

financial institution, and its officers, 

directors, employees, and agents are 

prohibited from notifying any person 

involved in a suspicious transaction that 

the transaction was reported.2 To 

encourage the voluntary reporting of 

possible violations of law and 

regulation, and the filing of SARs, the 

BSA also contains a safe harbor 

provision, which shields financial 

institutions making such reports from 

civil liability. 

FinCEN 3 has issued rules 

implementing the SAR confidentiality 

provisions for various types of financial 

institutions that closely mirror the 

statutory language.4 In addition, the 

Federal bank regulatory agencies 

implemented these provisions through 

similar regulations that provide SARs 

are confidential and generally no 

information about or contained in a SAR 

may be disclosed.5 The regulations 

issued by FinCEN and the Federal bank 

regulatory agencies also describe the 

applicability of the safe harbor 

provision to both voluntary reports of 

possible and known violations of law 

and the required filing of SARs.6

The USA PATRIOT Act of 2001 

strengthened the confidentiality of SARs 

by adding to the BSA a new provision 

that prohibits officers or employees of 

the Federal Government or any State, 

local, tribal, or territorial government 

within the United States with 

knowledge of a SAR, from disclosing to 

any person involved in a suspicious 

transaction that the transaction was 

reported, other than as necessary to 

fulfill the official duties of such officer 

or employee.7 The USA PATRIOT Act 

also clarified that the safe harbor 

shielding financial institutions from 

liability covers voluntary disclosures of 

possible violations of law and 

regulations to a government agency and 

expanded the scope of the limit on 

liability to cover any civil liability that 


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Federal Register / Vol. 75, No. 232 / Friday, December 3, 2010 / Rules and Regulations 75587 

8See USA PATRIOT Act, section 351(a), Pub. L. 

107–56, Title III, section 351, 115 Stat. 272, 321 

(2001); 31 U.S.C. 5318(g)(3). 

9See elsewhere in this issue of the Federal 

Register. 

10 74 FR 10139 (March 9, 2009). 

11 12 CFR 563.180(d)(13). 12 74 FR 10158 (Mar. 9, 2009). 13None of the comments received by the OTS 

directly addressed the proposed revisions to the 

OTS’s information disclosure regulation set forth in 

12 CFR part 510. 14Comments about the sharing guidance are 

addressed separately in a related ‘‘notice of 

availability of guidance’’ published by FinCEN 

elsewhere in today’s Federal Register together with 

FinCEN’s final rules. 15 12 CFR 1563.180(d)(13). 16 12 CFR 563.180(d)(2). 

17See, e.g., 31 CFR 103.19 (FinCEN regulations 

requiring brokers or dealers in securities to file 

reports of suspicious transactions on a SAR–S–F). 

18OTS’s current provision, at 12 CFR 

563.180(d)(2), requires a savings association or 

service corporation to ‘‘file a SAR with the 

appropriate Federal law enforcement agencies and 

the Department of the Treasury in accordance with 

the form’s instructions * * *,’’ but does not specify 

which form. 

19 12 CFR 563.180(d)(12). 

may exist ‘‘under any contract or other 

legally enforceable agreement (including 

any arbitration agreement).’’ 8

FinCEN is issuing a final rule to 

modify its SAR rules to interpret or 

further interpret the provisions of the 

BSA that relate to the confidentiality of 

SARs and the safe harbor for such 

reporting. The OTS is amending its SAR 

rules contemporaneously, consistent 

with the final rules being issued by 

FinCEN and the OCC, to clarify the 

manner in which these provisions apply 

to savings associations and service 

corporations and to the OTS’s own 

standards governing the disclosure of a 

SAR and any information that would 

reveal the existence of a SAR (referred 

to in this preamble as ‘‘SAR 

information’’). 

In a separate rulemaking action from 

the part 563 proposal, the OTS also 

simultaneously proposed to amend its 

information disclosure regulation set 

forth in 12 CFR part 510 to clarify that 

the exclusive standard governing the 

release of SAR information is set forth 

in 12 CFR 563.180.9 The OTS issued 

that proposed amendment to 12 CFR 

part 510 at the same time as the part 563 

proposal, to make clear that the OTS 

will disclose SAR information only 

when necessary to satisfy the BSA 

purposes for which SARs are filed. 

Today, the OTS also is adopting the part 

510 proposal as final without change. 

II. Overview of the Proposed Rule and 

Related Actions 

On March 9, 2009, the OTS published 

proposed amendments to its rules 10 to 

include key changes that would: (1) 

Clarify the scope of the statutory 

prohibition on the disclosure by a 

financial institution of a SAR, as it 

applies to savings associations and 

service corporations; (2) address the 

statutory prohibition on the disclosure 

by the government of a SAR, which was 

added to the BSA by section 351(b) of 

the USA PATRIOT Act of 2001, as that 

prohibition applies to the OTS’s 

standards governing the disclosure of 

SAR information; and (3) clarify that the 

exclusive standard applicable to the 

disclosure of SAR information by the 

OTS is to fulfill official duties 

consistent with the purposes of the 

BSA, in order to ensure that SAR 

information is protected from 

inappropriate disclosures unrelated to 

the BSA purposes for which SARs are 

filed. In addition, the proposed 

amendments would modify the safe 

harbor provision in the OTS’s SAR 

rules 11 to include changes made by the 

USA PATRIOT Act. 

Contemporaneously with the 

publication of, and as described in, the 

OTS’s proposal, FinCEN issued for 

notice and comment proposed guidance 

regarding the sharing of SARs with 

affiliates.12 That proposed guidance 

may be used to interpret a provision of 

the OTS’s proposed rulemaking. 

III. Comments on the Proposed Rule 

The comment period for the proposed 

rulemakings ended on June 8, 2009. 

OTS received a total of three 

comments.13 Of these, two were 

submitted by bank trade associations 

and one was submitted by an 

individual. The comments generally 

supported the OTS’s proposed rule 

while requesting broadening of 

FinCEN’s proposed sharing guidance.14

Comments specific to the OTS’s 

proposed rule provided suggestions 

related to the disclosure of the 

‘‘underlying facts, transactions, and 

documents upon which a SAR is based;’’ 

the requirement to reveal a SAR request 

to both OTS and FinCEN; and the 

proposed modification to the safe harbor 

provision in the OTS’s SAR rules 15 to 

include changes made by the USA 

PATRIOT Act. These comments are 

addressed in the Section-by-Section 

Analysis section of this SUPPLEMENTARY

INFORMATION. 

IV. Section-by-Section Analysis 

Section 563.180(d)(2)(iii) Definition of 

a SAR 

The primary purpose of the OTS’s 

SAR rule is to ensure that a savings 

association or service corporation files a 

SAR when it detects a known or 

suspected violation of a Federal law or 

a suspicious transaction related to 

money laundering activity or a violation 

of the BSA. See 12 CFR 563.180. 

Incidental to this purpose, the OTS’s 

SAR rule includes a section that 

addresses the confidentiality of SARs. 

Under the current SAR rule, the term 

‘‘SAR’’ means ‘‘a Suspicious Activity 

Report on the form prescribed by the 

OTS.’’ 16 The proposed rule would have 

defined a ‘‘SAR’’ generically as ‘‘a 

Suspicious Activity Report.’’ This 

change would extend the confidentiality 

provisions of the OTS’s SAR rule to all 

SARs, including those filed on forms 

prescribed by FinCEN.17 As a 

consequence, a savings association or 

service corporation that obtained a SAR, 

for example, from a non-bank affiliate 

pursuant to the provisions of the 

proposed rule, would be required to 

safeguard the confidentiality of the SAR, 

even if the SAR had not been filed on 

a form prescribed by the OTS. The OTS 

received no comments on the proposed 

revised definition of SAR and adopts 

the definition as proposed. 

Section 563.180(d)(3) SARs Required 

To clarify that a savings association or 

service corporation must file a SAR on 

a form ‘‘prescribed by the OTS,’’ the OTS 

proposed to add that phrase to the 

introductory language of the section of 

the OTS’s SAR rule that describes the 

procedures for the filing of a SAR. 

Accordingly, the proposed rule would 

have required a savings association or 

service corporation to file a SAR with 

the appropriate Federal law 

enforcement agencies and the 

Department of the Treasury on the form 

prescribed by the OTS in accordance 

with the form’s instructions, by sending 

a completed SAR to FinCEN in 

particular circumstances.18 The OTS 

received no comments on the proposal 

to add the phrase ‘‘prescribed by the 

OTS’’ to the introductory language of 

that section of the OTS’s SAR rule and 

adopts the change as proposed. 

Section 563.180(d)(12) Confidentiality 

of SARs 

The OTS proposed to amend its rules 

regarding SAR confidentiality 19 by 

modifying the introductory sentence 

regarding SAR confidentiality, and 

dividing the remainder of the current 

provision into two sections. The first 

section would describe the prohibition 

on disclosure of SAR information by 

savings association or service 

corporation and the rules of 

construction applicable to this 

prohibition. The second section would 

describe the prohibition on the OTS’s 

disclosure of SAR information. 


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20For example, a private litigant may serve a 

discovery request on a savings association or 

service corporation in civil litigation that calls for 

the savings association or service corporation to 

produce the underlying documentation on 

companies A, B, and C, where the financial 

institution has filed a SAR on company A, but not 

companies B or C, and the underlying 

documentation reflects the SAR filing decisions. If 

the savings association or service corporation then 

produces the underlying documentation for 

companies B and C, but neither confirms nor denies 

the existence of a SAR when declining to provide 

similar documentation for company A, by negative 

implication it may have revealed the existence of 

the SAR filed on company A. 

21As one commenter noted, information 

produced in the ordinary course of business may 

contain sufficient information that a reasonable and 

prudent person familiar with SAR filing 

requirements could use to conclude that an 

institution likely filed a SAR (e.g., a copy of a 

fraudulent check or a cash transaction log showing 

a clear pattern of structured deposits). Such 

information alone does not constitute information 

that would reveal the existence of a SAR. 

22See, e.g., Whitney Nat. Bank v. Karam, 306 F. 

Supp. 2d 678, 682 (S.D. Tex. 2004) (noting that 

courts have ‘‘allowed the production of supporting 

documentation that was generated or received in 

the ordinary course of the banks’ business, on 

which the report of suspicious activity was based’’); 

Cotton v. Private Bank and Trust Co., 235 F. Supp. 

2d 809, 815 (N.D. Ill. 2002) (holding that the 

‘‘factual documents which give rise to suspicious 

conduct * * * are to be produced in the ordinary 

course of discovery because they are business 

records made in the ordinary course of business’’). 

23See, e.g., Whitney at 682–83 (holding that the 

SAR confidentiality provision protects, inter alia, 

‘‘communications preceding the filing of a SAR and 

preparatory or preliminary to it; communications 

that follow the filing of a SAR and are explanations 

or follow-up discussion; or oral communications or 

suspected or possible violations that did not 

culminate in the filing of a SAR’’); Cotton at 815 

(holding that ‘‘documents representing the drafts of 

SARs or other work product or privileged 

communications that relate to the SAR itself * * * 

are not to be produced [in discovery] because they 

would disclose whether a SAR has been prepared 

or filed’’); Union Bank of California, N.A. v. 

Superior Court, 130 Cal. App. 4th 378, 391 (2005) 

(holding that ‘‘a draft SAR or internal memorandum 

prepared as part of a financial institution’s process 

for complying with federal reporting requirements 

is generated for the specific purpose of fulfilling the 

institution’s reporting obligation * * * [and] fall 

within the scope of SAR [confidentiality] because 

they may reveal the contents of a SAR and disclose 

whether a SAR has been prepared or filed’’). 

24 74 FR 10142—43 (March 9, 2009). 

Prior to this final rulemaking action, 

the OTS’s rules prohibiting the 

disclosure of SARs began with the 

statement that SARs are confidential. 

Over the years, the OTS has received 

numerous questions regarding the scope 

of the prohibition on the disclosure of 

a SAR in its current rules. Accordingly, 

the OTS proposed to clarify the scope of 

SAR confidentiality by more clearly 

describing the information that is 

subject to the prohibition. Like FinCEN 

and the OCC, the OTS believes that all 

of the reasons for maintaining the 

confidentiality of SARs are equally 

applicable to any information that 

would reveal the existence of a SAR. 

The OTS, like FinCEN and the OCC, 

recognizes that in order to protect the 

confidentiality of a SAR, any 

information that would reveal the 

existence of a SAR must be afforded the 

same protection from disclosure. The 

confidentiality of SARs must be 

maintained for a number of compelling 

reasons. For example, the disclosure of 

a SAR could result in notification to 

persons involved in the transaction that 

is being reported, and compromise any 

investigations being conducted in 

connection with the SAR. In addition, 

the OTS believes that even the 

occasional disclosure of a SAR could 

chill the willingness of a savings 

association or service corporation to file 

SARs, and to provide the degree of 

detail and completeness in describing 

suspicious activity in SARs that will be 

of use to law enforcement. If savings 

associations or service corporations 

believe that a SAR can be used for 

purposes unrelated to the law 

enforcement and regulatory purposes of 

the BSA, the disclosure of such 

information could adversely affect the 

timely, appropriate, and candid 

reporting of suspicious transactions. 

Savings associations and service 

corporations also may be reluctant to 

report suspicious transactions, or may 

delay making such reports, for fear that 

the disclosure of a SAR will interfere 

with its relationship with its customer. 

Further, a SAR may provide insight into 

how a savings association or service 

corporation uncovers potential criminal 

conduct that can be used by others to 

circumvent detection. The disclosure of 

a SAR also could compromise 

personally identifiable information or 

commercially sensitive information or 

damage the reputation of individuals or 

companies that may be named. Finally, 

the disclosure of a SAR for uses 

unrelated to the law enforcement and 

regulatory purposes for which SARs are 

intended increases the risk that 

employees of the savings association or 

service corporation or others who are 

involved in the preparation or filing of 

a SAR could become targets for 

retaliation by persons whose criminal 

conduct has been reported. 

These reasons for maintaining the 

confidentiality of SARs also apply to 

any information that would reveal the 

existence of a SAR. Therefore, like 

FinCEN and the OCC, the OTS proposed 

to modify the general introduction in its 

rules to state that confidential treatment 

also must be afforded to ‘‘any 

information that would reveal the 

existence of a SAR.’’ The introduction 

also would indicate that SAR 

information may not be disclosed, 

except as authorized in the narrow 

circumstances that follow. 

Some commenters asked that the OTS 

clarify the phrase ‘‘information that 

would reveal the existence of a SAR’’ for 

the purpose of defining the scope of 

SAR confidentiality. One commenter 

specifically asked whether that term 

only includes information that 

affirmatively states that a SAR was filed. 

Another commenter urged that the OTS 

formally recognize that material 

contained in a reporting institution’s 

files supporting its decision to file or 

not file a SAR is confidential. 

Any document or other information 

that affirmatively states that a SAR has 

been filed constitutes information that 

would reveal the existence of a SAR and 

must be kept confidential. By extension, 

a savings association or service 

corporation also must afford 

confidentiality to any document stating 

that a SAR has not been filed. Were the 

OTS to allow disclosure of information 

when a SAR is not filed, institutions 

would implicitly reveal the existence of 

a SAR any time they were unable to 

produce records because a SAR was 

filed.20

Documents that may identify 

suspicious activity, but that do not 

reveal whether a SAR exists (e.g., a 

document memorializing a customer 

transaction such as an account 

statement indicating a cash deposit or a 

record of a funds transfer), should be 

considered as falling within the 

underlying facts, transactions, and 

documents upon which a SAR is based, 

and need not be afforded 

confidentiality.21 This distinction is set 

forth in the final rule’s second rule of 

construction discussed in this Sectionby-Section Analysis and reflects 

relevant case law.22

However, the strong public policy that 

underlies the SAR system as a whole— 

namely, the creation of an environment 

that encourages a savings association or 

service corporation to report suspicious 

activity without fear of reprisal—leans 

heavily in favor of applying SAR 

confidentiality not only to a SAR itself, 

but also in appropriate circumstances to 

material prepared by the savings 

association or service corporation as 

part of its process to detect and report 

suspicious activity, regardless of 

whether a SAR ultimately was filed or 

not. This interpretation also reflects 

relevant case law.23

As explained in more detail in the 

proposed rule,24 the primary purpose 

for clarifying the scope of the 

confidentiality provision is to ensure 

that, due to potentially serious 

consequences, the persons involved in 


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25One example of such information could 

include summary information commonly provided 

by savings association or service corporations in the 

‘‘notification to the board’’ required by the various 

Federal bank regulatory agency SAR rules. Savings 

Associations subject to the requirement are 

encouraged to be cautious in the production of 

relevant portions of board minutes or other records 

to avoid the risk of potentially exposing SAR 

information to the subject, either directly or 

indirectly, in the event such records are 

subpoenaed. 

26See, e.g., Whitney Nat’l Bank v. Karam, 306 F. 

Supp. 2d 678, 682 (S.D. Tex. 2004); Cotton v. 

Private Bank and Trust Co., 235 F. Supp. 2d 809, 

815 (N.D. Ill. 2002). 

27Some commenters requested guidance related 

to the appropriate use of SARs by agents of savings 

associations and service corporations. In the 

Supplementary Information section of FinCEN’s 

final rule issued today, FinCEN states that it is 

considering additional guidance on the appropriate 

use of SARs by agents of financial institutions. 

Until such guidance is issued, however, the OTS 

and FinCEN remind financial institutions of their 

requirement to protect, through reasonable controls 

or agreements with their agents, the confidentiality 

of SAR information, as prescribed by the OTS and 

FinCEN final rules. 

the transaction and identified in the 

SAR cannot be notified, directly or 

indirectly, of the report. Accordingly, 

like FinCEN and the OCC, the OTS 

proposed replacing the previous rule 

text prohibiting disclosure of the SAR to 

the person involved in the transaction 

with a broad general confidentiality 

provision for all SAR information 

applicable to all persons not authorized 

in the rules of construction to receive 

such information. With respect to 

‘‘information that would reveal the 

existence of a SAR,’’ therefore, 

institutions should distinguish between 

certain types of statistical or abstract 

information or general discussions of 

suspicious activity that may indicate 

that an institution has filed SARs,25 and 

information that would reveal the 

existence of a SAR in a manner that 

could enable the person involved in the 

transaction potentially to be notified, 

whether directly or indirectly. 

Like FinCEN and the OCC, and for the 

reasons discussed in this section, the 

OTS is adopting the proposed 

introductory language to the 

Confidentiality of SARs provision 

(§ 563.180(d)(12)(ii) as final without 

change. 

Section 563.180(d)(12) Prohibition on 

Disclosure by Savings Associations 

The OTS’s current rules provide that 

any savings association or service 

corporation or person subpoenaed or 

otherwise requested to disclose a SAR 

or the information contained in a SAR 

must: (1) Decline to produce the SAR or 

to provide any information that would 

disclose that a SAR has been prepared 

or filed and (2) notify the OTS. 

The proposed rule more specifically 

addressed the prohibition on the 

disclosure of a SAR by a savings 

association or service corporation. The 

proposed rule provided that the 

prohibition includes ‘‘any information 

that would reveal the existence of a 

SAR’’ instead of using the phrase ‘‘any 

information that would disclose that a 

SAR has been prepared or filed.’’ The 

OTS, like FinCEN and the OCC, believes 

that the proposed phrase more clearly 

describes the type of information that is 

covered by the prohibition on the 

disclosure of a SAR. In addition, the 

proposed rule incorporated the specific 

reference in 31 U.S.C. 5318(g)(2)(A)(i) to 

a ‘‘director, officer, employees or agent,’’ 

in order to clarify that the prohibition 

on disclosure extends to those 

individuals in a savings association or 

service corporation who may have 

access to SAR information. 

Although 31 U.S.C. 5318(g)(2)(A)(i) 

provides that a person involved in the 

transaction may not be notified that the 

transaction has been reported, the 

proposed rule reflected case law that 

has consistently concluded, in 

accordance with applicable regulations, 

that financial institutions are broadly 

prohibited from disclosing SAR 

information to any person. Accordingly, 

these cases have held that, in the 

context of discovery in connection with 

civil lawsuits, financial institutions are 

prohibited from disclosing SAR 

information because section 5318(g) and 

its implementing regulations have 

created an unqualified discovery and 

evidentiary privilege for such 

information that cannot be waived by 

financial institutions.26 Consistent with 

case law and the current regulation, the 

texts of the proposed rule did not limit 

the prohibition on disclosure only to the 

person involved in the transaction. 

Permitting disclosure to any outside 

party may make it likely that SAR 

information would be disclosed to a 

person involved in the transaction, 

which the BSA absolutely prohibits. 

The proposed rule continued to 

provide that any savings association or 

service corporation, or any director, 

officer, employee or agent of a savings 

association or service corporation, 

subpoenaed or otherwise requested to 

disclose SAR information must decline 

to provide the information, citing that 

section of the rule and 31 U.S.C. 

5318(g)(2)(A)(i), and must give notice of 

the request to the OTS. In addition, the 

proposed rule required the savings 

association or service corporation to 

notify the OTS of its response to the 

request and required the savings 

association or service corporation to 

provide the same information to 

FinCEN. 

Commenters suggested that OTS 

adjust its SAR rule to remove the 

‘‘duplicative’’ requirement for a savings 

association to notify both OTS and 

FinCEN when SAR information is 

inappropriately requested. OTS, like 

FinCEN and the OCC, disagrees with the 

commenter’s characterization of the 

notification requirement as 

‘‘duplicative’’ because OTS and FinCEN 

each have issued, and separately 

administers, its own separate SAR rule. 

The joint notification requirement in the 

OTS’s final rule, therefore, simply 

acknowledges the notification 

requirement of different SAR 

regulations issued by separate agencies. 

Therefore, the OTS adopts proposed 

§ 560.183(d)(12) as final without change. 

Section 563.180(d)(12) Rules of 

Construction 

The OTS, like FinCEN and the OCC, 

proposed rules of construction to 

address issues that have arisen over the 

years about the scope of the SAR 

disclosure prohibition and to implement 

statutory modifications to the BSA made 

by the USA PATRIOT Act. The 

proposed rules of construction primarily 

describe situations that are not covered 

by the prohibition on disclosure of SAR 

information by a savings association or 

service corporation. The introduction to 

the proposed rules of construction 

makes clear that they are qualified by 

the statutory mandate that no person 

involved in any reported suspicious 

transaction can be notified that the 

transaction has been reported. The OTS 

received no comments on the proposed 

introductory language to the rules of 

construction and is adopting the 

language in the final rule as proposed. 

The first proposed rule of 

construction clarified the permissibility 

of disclosures to governmental 

authorities or other examining 

authorities that are otherwise entitled by 

law to receive SARs and to examine for 

or investigate suspicious activity. 

Specifically, the proposal was intended 

to clarify existing language that a 

savings association or service 

corporation, or any director, officer, 

employee, or agent 27 of a savings 

association may disclose SAR 

information to FinCEN or any Federal, 

State, or local law enforcement agency; 

or any Federal or State regulatory 

agency that examines the financial 

institution for compliance with the 

BSA. Although the permissibility of 

such disclosures may be readily 

apparent, the proposal contained this 

statement to clarify that a savings 


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28See Cotton v. Private Bank and Trust Co., 235 

F. Supp. 2d 809, 815 (N.D. Ill. 2002). 

29Although the underlying facts, transactions, 

and documents upon which a SAR is based may 

include previously filed SARs or other information 

that would reveal the existence of a SAR, these 

materials cannot be disclosed as underlying 

documents. 

30On December 21, 2006, FinCEN and the Federal 

bank regulatory agencies announced that the format 

for the SAR form for depository institutions had 

been revised to support a new joint filing initiative 

to reduce the number of duplicate SARs filed for 

a single suspicious transaction. ‘‘Suspicious Activity 

Report (SAR) Revised to Support Joint Filings and 

Reduce Duplicate SARs,’’ Joint Release issued by 

FinCEN, the FRB, the OCC, the OTS, the FDIC, and 

NCUA (Dec. 21, 2006). On February 17, 2006, 

FinCEN and the Federal bank regulatory agencies 

published a joint Federal Register notice seeking 

comment on proposed revisions to the SAR form. 

See 71 FR 8640. On May 1, 2007, FinCEN 

announced a delay in implementation of the revised 

SAR form until further notice. See 72 FR 23891. 

Until such time as a new SAR form is available that 

facilitates joint filing, institutions authorized to 

jointly file should follow FinCEN’s guidance to use 

the words ‘‘joint filing’’ in the narrative of the SAR 

and ensure that both institutions maintain a copy 

of the SAR and any supporting documentation (See, 

e.g., http://www.fincen.gov/statutes_regs/guidance/

html/guidance_faqs_sar_10042006.html). 

31 31 U.S.C. 5318(g)(2)(B). 

32However, other applicable laws or regulations 

governing a savings association’s responsibilities to 

maintain and protect information continue to apply, 

for example, information covered by part 510 of the 

OTS’s rules regarding the release of non-public OTS 

information. 

association or service corporation 

cannot use the prohibition on disclosure 

of SAR information to withhold this 

information from governmental 

authorities that are otherwise entitled by 

law to receive SARs and to examine for 

and investigate suspicious activity. 

Like FinCEN, OTS is adjusting the 

language slightly in the final rule to 

make a technical correction in the SAR 

rule text. The proposal stated that the 

rule should not be construed as 

prohibiting disclosure of a SAR ‘‘to 

FinCEN or any Federal, State or local 

law enforcement agency; or any Federal 

or State regulatory authority that 

examines the savings association for 

compliance with the Bank Secrecy Act.’’ 

The proposed rules sought to expand 

these terms by describing explicitly the 

types of entities that fit into those 

categories. Accordingly, the proposed 

rule used the phrase ‘‘* * * State 

regulatory authority that examines the 

savings association for compliance with 

the BSA.’’ Like FinCEN, OTS believes 

that commenters clearly understood and 

consented to the intent of this language, 

but will use the more technically 

accurate phrase ‘‘* * * State regulatory 

authority administering a State law that 

requires [the institution] to comply with 

the BSA or otherwise authorizes the 

State authority to ensure that the 

institution complies with the BSA’’ in 

the final rule. 

This change recognizes that State 

regulatory authorities are generally 

authorized by State law to examine for 

compliance with the BSA in one of two 

ways: (1) The law authorizes the State 

authority to examine the institution for 

compliance with all Federal laws and 

regulations generally or with the BSA 

explicitly, or (2) the law requires a 

financial institution to comply with all 

Federal laws and regulations generally 

or with the BSA explicitly, and 

authorizes the State authority to 

examine for compliance with the State 

law. An institution may provide SAR 

information to a State regulatory 

authority meeting either criterion. 

The second proposed rule of 

construction provided that SAR 

information does not include the 

underlying facts, transactions, and 

documents upon which a SAR is based. 

This statement reflects case law, which 

has recognized that, while a financial 

institution is prohibited from producing 

documents in discovery that evidence 

the existence of a SAR, factual 

documents created in the ordinary 

course of business (for example, 

business records and account 

information, upon which a SAR is 

based), may be discoverable in civil 

litigation under the Federal Rules of 

Civil Procedure.28

The second proposed rule of 

construction included some examples of 

situations where a savings association or 

service corporation may disclose the 

underlying facts, transactions, and 

documents upon which a SAR is based. 

The first example clarifies that a savings 

association or service corporation, or 

any director, officer, employee or agent 

of such a financial institution, may 

disclose this information 29 to another 

financial institution, or any director, 

officer, employee, or agent of a financial 

institution, for the preparation of a joint 

SAR.30 The second example simply 

codifies a rule of construction added to 

the BSA by section 351 of the USA 

PATRIOT Act, which provides that such 

underlying information may be 

disclosed in certain written employment 

references and termination notices.31

One commenter suggested that the 

OTS clarify that the illustrative 

examples are not exhaustive, and that 

there may be other situations not 

prescribed in the rule where an 

institution may disclose the underlying 

facts, transactions, and documents upon 

which a SAR is based. The OTS did not 

intend for these examples to be 

exhaustive and does not believe the text, 

as proposed, implies that the examples 

are exhaustive. For purposes of clarity, 

however, like FinCEN and the OCC, the 

OTS is revising the final rule’s language 

at § 563.180(d)(12) to read 

‘‘* * * [t]he underlying facts, transactions, 

and documents upon which a SAR is based, 

including but not limited to, disclosures’’ 

expressly listed as illustrative examples in 

the rule. Accordingly, with respect to the 

SAR confidentiality provision only,32 savings 

associations and service corporations may 

disclose underlying facts, transactions, and 

documents for any purpose, provided that no 

person involved in the transaction is notified 

that the transaction has been reported and 

none of the underlying information reveals 

the existence of a SAR. 

Another commenter suggested that 

the rules of construction include a 

provision expressly authorizing the 

disclosure of facts, transactions, or 

documents to affiliates wherever located 

and clarify that such authority may be 

exercised independently of the 

authority to share SAR information with 

affiliates. Provided that no person 

involved in any reported suspicious 

transaction is notified that the 

transaction has been reported and the 

underlying facts, transactions, and 

documents do not disclose SAR 

information, the OTS agrees that such 

disclosure by a savings association or 

service corporation to its affiliates, 

wherever located, is not prohibited by 

the final rule. Furthermore, the OTS 

agrees that the authorization for a 

savings association or service 

corporation to disclose underlying 

information to affiliates is independent 

of the authority to share SAR 

information with affiliates. The OTS 

believes that the final rule and the BSA 

already address that commenter’s 

concerns and that further revision to the 

rule is unnecessary. 

The third proposed rule of 

construction clarified that the 

prohibition on the disclosure of SAR 

information by a savings association or 

service corporation does not include the 

sharing by a savings association or 

service corporation, or any director, 

officer, employee or agent of a savings 

association, of SAR information within 

the savings association’s corporate 

organizational structure, for purposes 

consistent with Title II of the BSA, as 

determined by regulation or in 

guidance. The proposed third rule of 

construction recognizes that a savings 

association or service corporation may 

find it necessary to share SAR 

information to fulfill its reporting 

obligations under the BSA, and to 

facilitate more effective enterprise-wide 

BSA monitoring and reporting, 

consistent with Title II of the BSA. The 

term ‘‘share’’ used in the third rule of 

construction is an acknowledgement 

that sharing within a corporate 


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33 ‘‘Interagency Guidance on Sharing Suspicious 

Activity Reports with Head Offices and Controlling 

Companies’’ (January 20, 2006). 

34Under FinCEN’s final guidance, an ‘‘affiliate’’ of 

a depository institution means any company under 

common control with, or controlled by, that 

depository institution. 

35 31 U.S.C. 5311 (setting forth the purposes of the 

BSA). 

36See, e.g., Giglio v. United States, 405 U.S. 150, 

153–54 (1972); Brady v. State of Maryland, 373 U.S. 

83, 86–87 (1963); Jencks v. United States, 353 U.S. 

657, 668 (1957). 

organization for purposes consistent 

with Title II of the BSA, as determined 

by regulation or guidance issued by the 

OTS or FinCEN, is distinguishable from 

a prohibited disclosure. 

FinCEN and the Federal bank 

regulatory agencies have already issued 

joint guidance making clear that the 

U.S. branch or agency of a foreign bank 

may share a SAR with its head office, 

and that a U.S. bank or savings 

association may share a SAR with its 

controlling company (whether domestic 

or foreign). This guidance stated that the 

sharing of a SAR with a head office or 

controlling company both facilitates 

compliance with the applicable 

requirements of the BSA and enables 

the head office or controlling company 

to discharge its oversight 

responsibilities with respect to 

enterprise-wide risk management and 

compliance with applicable laws and 

regulations.33

Elsewhere in this issue of the Federal 

Register, FinCEN is issuing additional 

final guidance that further elaborates on 

sharing of SAR information within a 

corporate organization that FinCEN 

considers to be ‘‘consistent with the 

purposes of the BSA.’’ The final 

guidance generally permits the sharing 

of SAR information by depository 

institutions with their affiliates 34 that 

are subject to a SAR rule. 

In addition, OTS received comments 

that addressed FinCEN’s proposed 

guidance, much of which is addressed 

in FinCEN’s separate notice of 

availability of guidance published 

elsewhere in today’s Federal Register. 

In general, the commenters requested an 

expansion of the sharing authorities 

with respect to both the parties 

permitted to share and the parties with 

whom SAR information could be 

shared. Most commenters provided a 

clear rationale for how expanded SAR 

sharing would benefit their institutions 

by increasing efficiency, cutting costs, 

and enhancing the detection and 

reporting of suspicious activity. 

However, like FinCEN and the OCC, 

OTS notes that most commenters, 

however, failed to sufficiently address 

how they would effectively mitigate the 

risk of unauthorized disclosure of SAR 

information if the sharing authority was 

expanded to the extent they requested. 

The OTS and FinCEN believe the risk of 

unauthorized disclosure of SAR 

information outweighs the benefits of 

any expansion of the sharing authority 

at this time. Therefore, the third rule of 

construction is adopted as proposed 

without change. 

Section 563.180(d)(12) Prohibition on 

Disclosure by the OTS 

As previously noted, section 351 of 

the USA PATRIOT Act, 31 U.S.C. 

5318(g)(2)(A)(ii), amended the BSA, and 

added a new provision prohibiting 

officers and employees of the 

government from disclosing a SAR to 

any person involved in the transaction 

that the transaction has been reported, 

except ‘‘as necessary to fulfill the official 

duties of such officer or employee.’’ 

Section § 563.180(d)(12) of OTS’s 

proposed rule addressed this new 

provision of the BSA and is comparable 

to FinCEN’s proposal. The proposed 

section provided that the OTS will not, 

and no officer, employee or agent of the 

OTS, shall disclose SAR information, 

‘‘except as necessary to fulfill official 

duties consistent with Title II of the 

Bank Secrecy Act.’’ 

As stated in section 5318(g)(2)(A)(i), 

which prohibits a financial institution’s 

disclosure of a SAR, section 

5318(g)(2)(A)(ii) also prohibits the 

government from disclosing a SAR to 

‘‘any person involved in the 

transaction.’’ OTS, like FinCEN and 

OCC, proposed to address sections 

5318(g)(2)(A)(i) and (A)(ii) in a 

consistent manner, because disclosure 

by a governmental authority of SAR 

information to any outside party may 

make it more likely that the information 

will be disclosed to a person involved 

in the transaction. Accordingly, the 

proposed rule would generally bar 

disclosures of SAR information by OTS 

officers, employees, or agents. 

However, section 5318(g)(2)(A)(ii) 

also narrowly permits governmental 

disclosures as necessary to ‘‘fulfill 

official duties,’’ a phrase that is not 

defined in the BSA. Consistent with the 

rules being proposed by FinCEN and the 

OCC, OTS proposed to construe this 

phrase in the context of the BSA, in 

light of the purpose for which SARs are 

filed. Accordingly, the proposed rule 

interpreted ‘‘official duties’’ to mean 

‘‘official duties consistent with the 

purposes of Title II of the BSA,’’ namely, 

for ‘‘criminal, tax, or regulatory 

investigations or proceedings, or in the 

conduct of intelligence or 

counterintelligence activities, including 

analysis, to protect against international 

terrorism.’’ 35 When disclosure is 

necessary to fulfill official duties, OTS 

will make a determination, through its 

internal processes, that a SAR may be 

disclosed to fulfill official duties 

consistent with the BSA. This standard 

would permit, for example, disclosures 

responsive to a grand jury subpoena; a 

request from an appropriate Federal or 

State law enforcement agency; a request 

from an appropriate Congressional 

committee or subcommittee; and 

prosecutorial disclosures mandated by 

statute or the Constitution, in 

connection with the statement of a 

government witness to be called at trial, 

the impeachment of a government 

witness, or as material exculpatory of a 

criminal defendant.36 This proposed 

interpretation of section 

5318(g)(2)(A)(ii) would ensure that SAR 

information will not be disclosed for a 

reason that is unrelated to the purposes 

of the BSA. For example, this standard 

would not permit disclosure of SAR 

information to the media. 

The proposed rule also specifically 

provided that ‘‘official duties’’ shall not 

include the disclosure of SAR 

information in response to a request for 

use in a private legal proceeding or in 

response to a request for disclosure of 

non-public information under 12 CFR 

510. This statement, which 

corresponded to a similar provision in 

FinCEN’s proposed rules, establishes 

that OTS will not disclose SAR 

information to a private litigant for use 

in a private legal proceeding, or 

pursuant to 12 CFR 510.5, because such 

a request cannot be consistent with any 

of the purposes enumerated in Title II 

of the BSA. The BSA exists, in part, to 

protect the public’s interest in an 

effective reporting system that benefits 

the nation by helping to ensure that the 

U.S. financial system will not be used 

for criminal activity or to support 

terrorism. OTS like the OCC and 

FinCEN, believes that this purpose 

would be undermined by the disclosure 

of SAR information to a private litigant 

for use in a civil lawsuit for the reasons 

described earlier, including that such 

disclosures will chill full and candid 

reporting by savings associations and 

service corporations. 

Finally, the proposed rule applied to 

OTS, in addition to its officers, 

employees, and agents. Comparable to a 

provision being proposed by FinCEN 

and the OCC, OTS proposed to include 

the agency itself in the scope of 

coverage, because requests for SAR 

information are typically directed to the 

agency, rather than to individuals 

within the OTS with authority to 


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37See supra note 1. 

38See 31 CFR 103.18(e), 12 CFR 563.180(d)(13) 

and 12 CFR 21.11(l). The safe harbor regulations are 

also applicable to oral reports of violations. (In 

situations requiring immediate attention, a savings 

association must immediately notify its regulator 

and appropriate law enforcement by telephone, in 

addition to filing a SAR. See, e.g., 12 CFR 21.11(d).) 

39 31 U.S.C. 5318(g)(3). 

40See elsewhere in this issue of the Federal 

Register. 

respond to the request. In addition, 

agents were included in the proposal 

because agents of OTS may have access 

to SAR information. Accordingly, the 

proposed interpretation would more 

comprehensively cover disclosures by 

OTS or agents of OTS, and protect the 

confidentiality of SAR information. OTS 

did not receive comments on this issue 

and is adopting this provision as final 

without change. 

Section 563.180(d)(13) Safe Harbor/ 

Limitation on Liability 

In 1992, the Annunzio-Wylie Act 

amended the BSA by providing a safe 

harbor for financial institutions and 

their employees from civil liability for 

the reporting of known or suspected 

criminal offenses or suspicious activity 

through the filing of a SAR.37 OTS, 

FinCEN and the OCC incorporated the 

safe harbor provisions of the 1992 law 

into their SAR rules.38 Section 351 of 

the USA PATRIOT Act amended section 

5318(g)(3) to clarify that the scope of the 

safe harbor provision includes the 

voluntary disclosure of possible 

violations of law and regulations to a 

government agency and to expand the 

scope of the limit on civil liability to 

include any liability that may exist 

‘‘under any contract or other legally 

enforceable agreement (including any 

arbitration agreement).’’ 39 OTS, like 

FinCEN and the OCC, incorporated the 

statutory expansion of the safe harbor by 

cross-referencing section 5318(g)(3) in 

the proposed rule. 

In addition, consistent with the 

proposed rule issued by FinCEN, this 

provision makes clear that the safe 

harbor also applies to a disclosure by a 

savings association or service 

corporation made jointly with another 

financial institution for purposes of 

filing a joint SAR. 

OTS received no comments on the 

proposed safe harbor provision. 

However, one comment received by 

FinCEN noted that the statutory safe 

harbor provision protects any person 

from liability, not just the person 

involved in the transaction. 

Accordingly, like FinCEN and the OCC, 

OTS is amending the proposed safe 

harbor language by inserting the phrase 

‘‘shall be protected from liability to any 

person, for any such disclosure * * *.’’ 

and is otherwise adopting proposed 

§ 563.180(d)(l3) safe harbor provision as 

final. 

Conforming Amendments to 12 CFR 

Part 510 

Today, OTS also is publishing a final 

rule to amend its information disclosure 

rule set forth in 12 CFR part 510. Among 

other things, the final rule clarifies that 

the OTS’s disclosure of SAR 

information will be governed 

exclusively by the standards set forth in 

the amendments to OTS’s SAR rule set 

forth in 12 CFR 563.180.40 The effect of 

these final part 510 amendments is that 

OTS: (1) Will not release SAR 

information to private litigants and (2) 

will only release SAR information to 

other government agencies, in response 

to a request pursuant to 12 CFR 563.180 

or in the exercise of its discretion, when 

necessary to fulfill official duties 

consistent with the purposes of Title II 

of the BSA. 

V. OTS Regulatory Analysis 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

generally requires an agency that is 

issuing a final rule to prepare and make 

available a final regulatory flexibility 

analysis that describes the impact of the 

final rule on small entities, 5 U.S.C. 604. 

However, the RFA provides that an 

agency is not required to prepare and 

make available a final regulatory 

flexibility analysis if the agency certifies 

that the final rule will not have a 

significant economic impact on a 

substantial number of small entities and 

publishes its certification and a short, 

explanatory statement in the Federal 

Register along with its final rule. 5 

U.S.C. 605(b). For purposes of the RFA 

and OTS-regulated entities, a ‘‘small 

entity’’ is a savings association or service 

corporation with assets of $175 million 

or less. 

OTS has determined that the costs, if 

any, associated with the final rule are de 

minimis. The final rule simply clarifies 

the scope of the statutory prohibition 

against the disclosure by financial 

institutions and by the government of 

SAR information and clarifies the scope 

of the safe harbor from liability for 

institutions that report suspicious 

activities. Therefore, pursuant to section 

605(b) of the RFA, OTS hereby certifies 

that this final rule will not have a 

significant economic impact on a 

substantial number of small entities. 

Accordingly, a regulatory flexibility 

analysis is not needed. 

Executive Order 12866 

OTS has determined that this final 

rule is not a significant regulatory action 

under Executive Order 12866. We have 

concluded that the changes made by 

this final rule will not have an annual 

effect on the economy of $100 million 

or more. OTS further concludes that this 

final rule does not meet any of the other 

standards for a significant regulatory 

action set forth in Executive Order 

12866. 

Paperwork Reduction Act 

We have reviewed the final rule in 

accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3506; 

5 CFR 1320, Appendix A.1) (PRA) and 

have determined that it does not contain 

any ‘‘collections of information’’ as 

defined by the PRA. 

Unfunded Mandates Reform Act of 1995 

Section 202 of the Unfunded 

Mandates Reform Act of 1995, Public 

Law 104–4 (2 U.S.C. 1532) (Unfunded 

Mandates Act), requires that an agency 

prepare a budgetary impact statement 

before promulgating any rule likely to 

result in 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 

or more in any one year. If a budgetary 

impact statement is required, section 

205 of the Unfunded Mandates Act also 

requires an agency to identify and 

consider a reasonable number of 

regulatory alternatives before 

promulgating a rule. 

OTS has determined that this final 

rule will not result in expenditures by 

State, local, and tribal governments, or 

by the private sector, of $100 million or 

more in any one year. Accordingly, this 

proposal is not subject to section 202 of 

the Unfunded Mandates Act. 

List of Subjects in 12 CFR Part 563 

Crime, Currency, Savings 

associations, reporting and 

recordkeeping requirements, Security 

measures. 

Authority and Issuance 

■ For the reasons set forth in the 

preamble, part 563 of title 12 of the 

Code of Federal Regulations is amended 

as follows: 

PART 563—SAVINGS 

ASSOCIATIONS—OPERATIONS 

■ 1. The authority citation for part 563 

continues to read as follows: 

Authority: 12 U.S.C. 375b, 1462a, 1463, 

1464, 1467a, 1468, 1817, 1828, 3806; 31 

U.S.C 5318. 


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Federal Register / Vol. 75, No. 232 / Friday, December 3, 2010 / Rules and Regulations 75593 

■ 2. Section 563.180 is amended by 

revising paragraphs (d)(2)(iii) and (d)(3) 

introductory text, adding a new 

sentence to the end of paragraph (d)(8), 

and revising paragraph (d)(12) to read as 

follows: 

§ 563.180 Suspicious Activity Reports and 

other reports and statements. 

* * * * * 

(d) * * * 

(2) * * * 

(iii) SAR means a Suspicious Activity 

Report. 

(3) SARs required. A savings 

association or service corporation shall 

file a SAR with the appropriate Federal 

law enforcement agencies and the 

Department of the Treasury on the form 

prescribed by the OTS and in 

accordance with the form’s instructions, 

by sending a completed SAR to FinCEN 

in the following circumstances: 

* * * * * 

(8) Retention of records. * * * A 

savings association or service 

corporation shall make all supporting 

documentation available to OTS, 

FinCEN, or any Federal, State, or local 

law enforcement agency, or any Federal 

regulatory authority that examines the 

savings association or service 

corporation for compliance with the 

Bank Secrecy Act, or any State 

regulatory authority administering a 

State law that requires the savings 

association or service corporation to 

comply with the Bank Secrecy Act or 

otherwise authorizes the State authority 

to ensure that the institution complies 

with the Bank Secrecy Act, upon 

request. 

* * * * * 

(12) Confidentiality of SARs. A SAR, 

and any information that would reveal 

the existence of a SAR, are confidential, 

and shall not be disclosed except as 

authorized in this paragraph (d)(12). 

(i) Prohibition on disclosure by 

savings associations or service 

corporations. (A) General rule. No 

savings association or service 

corporation, and no director, officer, 

employee, or agent of a savings 

association or service corporation, shall 

disclose a SAR or any information that 

would reveal the existence of a SAR. 

Any savings association or service 

corporation, and any director, officer, 

employee, or agent of any savings 

association or service corporation that is 

subpoenaed or otherwise requested to 

disclose a SAR, or any information that 

would reveal the existence of a SAR, 

shall decline to produce the SAR or 

such information, citing this section and 

31 U.S.C. 5318(g)(2)(A)(i), and shall 

notify the following of any such request 

and the response thereto: 

(A) Deputy Chief Counsel, Litigation 

Division, Office of Thrift Supervision; 

and 

(B) The Financial Crimes Enforcement 

Network (FinCEN). 

(ii) Rules of construction. Provided 

that no person involved in any reported 

suspicious transaction is notified that 

the transaction has been reported, 

paragraph (d)(1) of this section shall not 

be construed as prohibiting: 

(A) The disclosure by a savings 

association or service corporation, or 

any director, officer, employee or agent 

of a savings association or service 

corporation of: 

(1) A SAR, or any information that 

would reveal the existence of a SAR, to 

FinCEN or OTS, or any Federal, State, 

or local law enforcement agency; or any 

Federal regulatory authority that 

examines the savings association or 

service corporation for compliance with 

the Bank Secrecy Act, or any State 

regulatory authority administering a 

State law that requires compliance with 

the Bank Secrecy Act or otherwise 

authorizes the State authority to ensure 

that the institution complies with the 

Bank Secrecy Act; or 

(2) The underlying facts, transactions, 

and documents upon which a SAR is 

based, including, but not limited to, 

disclosures: 

(i) To another financial institution, or 

any director, officer, employee or agent 

of a financial institution, for the 

preparation of a joint SAR; or 

(ii) In connection with certain 

employment references or termination 

notices, to the full extent authorized in 

31 U.S.C. 5318(g)(2)(B); or 

(B) The sharing by a savings 

association or service corporation, or 

any director, officer, employee, or agent 

of a savings association or service 

corporation, of a SAR, or any 

information that would reveal the 

existence of a SAR, within the corporate 

organizational structure of the savings 

association or service corporation, for 

purposes consistent with Title II of the 

Bank Secrecy Act as determined by 

regulation or in guidance. 

(iii) Prohibition on disclosure by OTS. 

The OTS will not, and no officer, 

employee or agent of OTS, shall disclose 

a SAR, or any information that would 

reveal the existence of a SAR, except as 

necessary to fulfill official duties 

consistent with Title II of the Bank 

Secrecy Act. For purposes of this 

section, ‘‘official duties’’ shall not 

include the disclosure of a SAR, or any 

information that would reveal the 

existence of a SAR, in response to a 

request for use in a private legal 

proceeding or in response to a request 

for disclosure of non-public information 

under 12 CFR 510.5. 

(iv) Limitation on liability. A savings 

association or service corporation and 

any director, officer, employee or agent 

of a savings association or service 

corporation that makes a voluntary 

disclosure of any possible violation of 

law or regulation to a government 

agency or makes a disclosure pursuant 

to this section or any other authority, 

including a disclosure made jointly with 

another institution, shall be protected 

from liability for any such disclosure, or 

for failure to provide notice of such 

disclosure to any person identified in 

the disclosure, or both, to the full extent 

provided by 31 U.S.C. 5318(g)(3). 

* * * * * 

Dated: June 1, 2010. 

By the Office of Thrift Supervision. 

John E. Bowman, 

Acting Director. 

[FR Doc. 2010–29877 Filed 12–2–10; 8:45 am] 

BILLING CODE 6720–01–P 

DEPARTMENT OF THE TREASURY 

31 CFR Part 103 

RIN 1506–AA99 

Financial Crimes Enforcement 

Network; Confidentiality of Suspicious 

Activity Reports 

AGENCY: The Financial Crimes 

Enforcement Network (‘‘FinCEN’’), 

Treasury. 

ACTION: Final rule. 

SUMMARY: FinCEN is issuing this final 

rule to amend the Bank Secrecy Act 

(‘‘BSA’’) regulations regarding the 

confidentiality of a report of suspicious 

activity (‘‘SAR’’) to: Clarify the scope of 

the statutory prohibition against the 

disclosure by a financial institution of a 

SAR; address the statutory prohibition 

against the disclosure by the 

government of a SAR; clarify that the 

exclusive standard applicable to the 

disclosure of a SAR by the government 

is to fulfill official duties consistent 

with the purposes of the BSA; modify 

the safe harbor provision to include 

changes made by the Uniting and 

Strengthening America by Providing the 

Appropriate Tools Required to Intercept 

and Obstruct Terrorism Act of 2001 

(‘‘USA PATRIOT Act’’); and make minor 

technical revisions for consistency and 

harmonization among the different SAR 

rules. These amendments are part of the 

Department of the Treasury’s continuing 

effort to increase the efficiency and 

effectiveness of its anti-money 

laundering and counter-terrorist 


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