Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Rules and Regulations 15323 

opinion, qualified opinion, adverse 

opinion, or disclaimer of opinion); 

(vi) A statement as to whether the 

audit disclosed any audit findings that 

the auditor is required to report under 

§ 910.516 Audit findings, paragraph (a); 

(vii) Not applicable. 

(viii) Not applicable. 

(ix) Not applicable. 

(2) Findings relating to the financial 

Statements (if available) which are 

required to be reported in accordance 

with GAGAS. 

(3) Findings and questioned costs for 

DOE awards which must include audit 

findings as defined in § 910.516 Audit 

findings, paragraph (a). 

(i) Audit findings (e.g., internal 

control findings, compliance findings, 

questioned costs, or fraud) that relate to 

the same issue should be presented as 

a single audit finding. 

(ii) Audit findings that relate to both 

the financial statements (if available) 

and DOE awards, as reported under 

paragraphs (d)(2) and (3) of this section, 

respectively, should be reported in both 

sections of the schedule. However, the 

reporting in one section of the schedule 

may be in summary form with a 

reference to a detailed reporting in the 

other section of the schedule. 

(e) Nothing in this part precludes 

combining of the audit reporting 

required by this section with the 

reporting required by § 910.512 Report 

submission, paragraph (b), when 

allowed by GAGAS. 

■ 17. Section 910.519 is revised to read 

as follows: 

§ 910.519 Criteria for Federal program risk. 

(a) General. The auditor’s 

determination should be based on an 

overall evaluation of the risk of 

noncompliance occurring that could be 

material to the DOE program. The 

auditor must consider criteria, such as 

described in paragraphs (b), (c), and (d) 

of this section, to identify risk in 

Federal programs. Also, as part of the 

risk analysis, the auditor may wish to 

discuss a particular DOE program with 

auditee management and DOE. 

(b) Current and prior audit 

experience. (1) Weaknesses in internal 

control over DOE programs would 

indicate higher risk. Consideration 

should be given to the control 

environment over DOE programs and 

such factors as the expectation of 

management’s adherence to Federal 

statutes, regulations, and the terms and 

conditions of DOE awards and the 

competence and experience of 

personnel who administer the DOE 

programs. 

(i) A DOE program administered 

under multiple internal control 

structures may have higher risk. The 

auditor must consider whether 

weaknesses are isolated in a single 

operating unit (e.g., one college campus) 

or pervasive throughout the entity. 

(ii) When significant parts of a DOE 

program are passed through to 

subrecipients, a weak system for 

monitoring subrecipients would 

indicate higher risk. 

(2) Prior audit findings would 

indicate higher risk, particularly when 

the situations identified in the audit 

findings could have a significant impact 

on a DOE program or have not been 

corrected. 

(3) DOE programs not recently 

audited as major programs may be of 

higher risk than Federal programs 

recently audited as major programs 

without audit findings. 

(c) Oversight exercised by DOE. (1) 

Oversight exercised by DOE could be 

used to assess risk. For example, recent 

monitoring or other reviews performed 

by an oversight entity that disclosed no 

significant problems would indicate 

lower risk, whereas monitoring that 

disclosed significant problems would 

indicate higher risk. 

(2) Federal agencies, with the 

concurrence of OMB, may identify 

Federal programs that are higher risk. 

OMB will provide this identification in 

the compliance supplement. 

(d) Inherent risk of the Federal 

program. (1) The nature of a Federal 

program may indicate risk. 

Consideration should be given to the 

complexity of the program and the 

extent to which the Federal program 

contracts for goods and services. For 

example, Federal programs that disburse 

funds through third party contracts or 

have eligibility criteria may be of higher 

risk. Federal programs primarily 

involving staff payroll costs may have 

high risk for noncompliance with 

requirements of 2 CFR 200.430 

Compensation—personal services, but 

otherwise be at low risk. 

(2) The phase of a Federal program in 

its life cycle at the Federal agency may 

indicate risk. For example, a new 

Federal program with new or interim 

regulations may have higher risk than 

an established program with time-tested 

regulations. Also, significant changes in 

Federal programs, statutes, regulations, 

or the terms and conditions of Federal 

awards may increase risk. 

(3) The phase of a Federal program in 

its life cycle at the auditee may indicate 

risk. For example, during the first and 

last years that an auditee participates in 

a Federal program, the risk may be 

higher due to start-up or closeout of 

program activities and staff. 

(4) Programs with larger Federal 

awards expended would be of higher 

risk than programs with substantially 

smaller Federal awards expended. 

■ 18. Section 910.520 is revised to read 

as follows: 

§ 910.520 Criteria for a low-risk auditee. 

An auditee that meets all of the 

following conditions for each of the 

preceding two audit periods may qualify 

as a low-risk auditee and be eligible for 

reduced audit coverage. 

(a) Compliance audits were performed 

on an annual basis in accordance with 

the provisions of this Subpart, including 

submitting the data collection form to 

DOE within the timeframe specified in 

§ 910.512 Report submission. A forprofit entity that has biennial audits 

does not qualify as a low-risk auditee. 

(b) The auditor’s opinion on whether 

the financial statements (if available) 

were prepared in accordance with 

GAAP, or a basis of accounting required 

by state law, and the auditor’s in 

relation to opinion on the schedule of 

expenditures of DOE awards were 

unmodified. 

(c) There were no deficiencies in 

internal control which were identified 

as material weaknesses under the 

requirements of GAGAS. 

(d) The auditor did not report a 

substantial doubt about the auditee’s 

ability to continue as a going concern. 

(e) None of the DOE programs had 

audit findings from any of the following 

in either of the preceding two audit 

periods: 

(1) Internal control deficiencies that 

were identified as material weaknesses 

in the auditor’s report on internal 

control as required under § 910.515 

Audit reporting, paragraph (c); 

(2) Not applicable. 

(3) Not applicable. 

[FR Doc. 2022–04240 Filed 3–17–22; 8:45 am] 

BILLING CODE 6450–01–P 

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. 

ACTION: Final rule. 

SUMMARY: This final rule modifies the 

requirements for national banks and 


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15324 Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Rules and Regulations 

1 86 FR 6572 (Jan. 22, 2021) (OCC); 86 FR 6576 

(Jan. 22, 2021) (Board); 86 FR 6580 (Jan. 22, 2021) 

(FDIC); 86 FR 6586 (Jan. 22, 2021) (NCUA). 

2The OCC first codified this requirement in 1971 

at 12 CFR 7.5225, which required national banks to 

submit a report 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’’ to the OCC, the Federal 

Bureau of Investigations (FBI), the U.S. attorney for 

the bank’s district, and the bank’s bonding 

company. 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. 

3 54 FR 25839 (June 20, 1989). 

4Public Law 102–550, 106 Stat. 3672 (1992). 

5 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. 

6 61 FR 4326 (Feb. 5, 1996). Before FinCEN’s SAR 

regulation was adopted 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). Congress authorized the Secretary of the 

Treasury to administer the BSA, and the Secretary 

has delegated to the Director of FinCEN the 

authority to implement, administer, and enforce 

compliance with the Act. Treasury Order 180–01 

(Jan. 14, 2020). 

7 61 FR 4332 (Feb. 5, 1996) (OCC). 

8See 12 CFR 21.11(c)(4) and 163.180(d)(3)(i)–(iv) 

(OCC); 31 CFR 1020.320(a)(2). 

9 12 CFR 21.11(k) and 163.180(d)(12) (OCC); 31 

CFR 1020.320(e) (FinCEN). 

Federal savings associations, including 

Federal branches and agencies of foreign 

banks licensed or chartered by the OCC, 

to file suspicious activity reports 

(SARs). It amends the OCC’s SAR 

regulations to allow the OCC to issue 

exemptions from the requirements of 

those regulations upon request from a 

financial institution subject to those 

regulations. The rule harmonizes the 

OCC’s legal authority with the 

preexisting exemption authority of the 

Financial Crimes Enforcement Network 

(FinCEN) of the U.S. Department of the 

Treasury. This rule will make it possible 

for the OCC to facilitate changes 

required by the Anti-Money Laundering 

Act of 2020. The final rule will also 

make 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: This rule is effective on May 1, 

2022. 

FOR FURTHER INFORMATION CONTACT: 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. On January 22, 

2021, the OCC, the Board of Governors 

of the Federal Reserve System (Board), 

the Federal Deposit Insurance 

Corporation (FDIC), and the National 

Credit Union Administration (NCUA) 

(collectively, the agencies or Federal 

banking agencies) published 

substantially similar proposed rules that 

would amend their respective SAR 

regulations to allow the agencies to 

issue exemptions from the requirements 

of those regulations.1 The OCC is 

adopting its proposed rule in final form. 

II. Background 

The OCC has long required its 

regulated institutions to report potential 

violations of law arising from 

transactions that flow through those 

institutions.2 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.3

In 1992 Congress passed the 

Annunzio-Wylie Anti-Money 

Laundering Act, which redesigned the 

criminal referral process applicable to 

financial institutions including OCCsupervised entities and made the 

reporting of certain suspicious 

transactions a requirement of the Bank 

Secrecy Act (BSA).4 The Act permitted 

the U.S. Department of the Treasury 

(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.’’ 5 As a result, the Treasury, 

in consultation with the 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 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 

BSA’s reporting requirements.6 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.7

As a result of this redesign and 

FinCEN’s implementing regulations, 

national banks and Federal savings 

associations now must file SARs under 

both OCC and FinCEN regulations. The 

OCC’s regulations are not identical but 

are substantially similar to the 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.8 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 unless an 

exception applies.9

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 


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Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Rules and Regulations 15325 

10See 12 CFR 21.11; 163.180 (OCC); 12 CFR 

208.62 (Board); 12 CFR 390.353 (FDIC); 12 CFR 

748.1 (NCUA). 

11 12 CFR 21.11 and 163.180 (OCC); 31 CFR 

1020.320 (FinCEN). 

12 12 CFR 21.11(l) and 163.180(d)(12)(iv) (OCC); 

31 CFR 1020.320(l) (FinCEN). 

13 12 CFR 21.11(h) and 163.180(d)(9). 

14See 31 U.S.C. 5318(a)(7) with implementing 

regulations at 31 CFR 1010.970. 

15 31 CFR 1010.970(a). 

16Treasury Order 180–01 (Jan. 14, 2020). 

17See also 12 U.S.C. 1463(a)(2). 

18 12 U.S.C. 1. 

19 Joint Statement on Innovative Efforts to Combat 

Money Laundering and Terrorist Financing (Dec. 3, 

2018), available at https://www.occ.gov/newsissuances/news-releases/2018/nr-occ-2018- 

130a.pdf. 20Public Law 116–283 (Jan. 1, 2021). 

agencies require reporting in broader 

circumstances (e.g., insider abuse at any 

dollar amount).10 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 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) for SAR 

recordkeeping requirements 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.11 The regulations also 

provide a limitation on liability for any 

national bank, Federal savings 

association, or other financial 

institution and any director, officer, 

employee, or agent of a national bank, 

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 pursuant 

to any other authority.12 The OCC’s 

regulations contain a provision 

requiring that national banks and 

Federal savings associations promptly 

notify their board of directors when a 

SAR has been filed.13

Although neither the OCC’s SAR 

regulations nor FinCEN’s SAR 

regulation expressly address 

exemptions, FinCEN has general 

authority to grant exemptions from the 

requirements of the BSA, which 

includes granting exemptions under its 

SAR reporting regulations.14 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.’’ 15 The 

Secretary delegated this exemption 

authority to FinCEN.16

The OCC’s authority to issue SAR 

exemptions derives from its authority to 

require national banks and Federal 

savings associations to comply with 

OCC-imposed SAR requirements. The 

OCC has broad statutory authority to 

issue regulations for national banks and 

Federal savings associations. Among 

other relevant sources of authority, 12 

U.S.C. 161 provides that the 

Comptroller may call for ‘‘special 

reports.’’ Twelve U.S.C. 93a also 

provides that the Comptroller ‘‘is 

authorized to prescribe rules and 

regulations to carry out the 

responsibilities of the office.’’ 17 The 

OCC has long viewed SAR requirements 

and their predecessor reporting 

requirements to be part of the OCC’s 

mission of assuring safety and 

soundness.18 The OCC’s legal authority 

to require reports necessarily includes 

the authority to modify those reporting 

requirements, including the authority, if 

necessary, to issue exemptions. 

However, the OCC’s SAR regulations 

currently contain no express exemption 

provisions similar to FinCEN’s general 

authority to grant exemptions from the 

requirements of the BSA. 

This disparity in exemption authority 

makes it more difficult for the OCC to 

grant relief if a national bank or Federal 

savings association has a novel SARrelated proposal that does not squarely 

fit within the regulatory requirements 

but would be consistent with antimoney laundering regulatory and safety 

and soundness standards. As financial 

technology and innovation continue to 

develop in the area of monitoring and 

reporting financial crime and terrorist 

financing, the OCC has identified a need 

for regulatory flexibility to grant 

exemptive relief when appropriate. In 

2018 FinCEN and the Federal banking 

agencies issued a statement encouraging 

banks to take innovative approaches to 

meet their BSA/anti-money laundering 

(BSA/AML) compliance obligations.19

That statement explained that banks are 

encouraged to consider, evaluate, and, 

when appropriate, responsibly 

implement innovative approaches for 

BSA/AML compliance. Today, 

innovative approaches and 

technological developments in 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. The OCC 

anticipates that 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 data, and 

the use and sharing of de-identified data 

(commonly referred to as anonymized 

data). 

The OCC expects that new 

technologies will continue to prompt 

additional innovative approaches 

related to SAR filing and monitoring. 

Some of these approaches may not 

strictly comply with certain provisions 

of the OCC’s SAR regulations. For 

example, certain approaches involving 

SAR-sharing across institutions may 

violate prohibitions against disclosures 

of SARs in 12 CFR 21.11(k) but would 

enable an institution to file more 

complete, useful SARs without 

substantively undermining the purposes 

of the SAR disclosure prohibition. 

After the posting of the proposed rule 

on the OCC website, but before its 

publication in the Federal Register, 

Congress passed the Anti-Money 

Laundering Act of 2020 (AMLA of 

2020).20 The AMLA of 2020 included 

multiple provisions that will affect 

suspicious activity reporting. Section 

6202 of the AMLA of 2020 provides that 

SARs ‘‘filed under this subsection shall 

be guided by the compliance program of 

a covered financial institution with 

respect to the Bank Secrecy Act, 

including the risk assessment processes 

of the covered institution.’’ Section 6212 

of the AMLA of 2020 directs Treasury 

to establish a pilot program on SAR 

sharing. Section 6204 of the AMLA Act 

of 2020 requires the Treasury Secretary, 

in consultation with various relevant 

stakeholders, to conduct a formal review 

of the financial institutions’ Currency 

Transaction Report (CTR) and SAR 

reporting requirements, including 

processes for submission, regulations 

implementing the BSA, and any 


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21 12 CFR 21.11(k); 12 CFR 163.180(d)(12). 

22This final rule, like the OCC’s general SAR 

requirements, applies to Federal branches and 

agencies of foreign banks licensed or chartered by 

the OCC. See 12 CFR 21.11(a). 

23The other agencies that simultaneously 

published proposed rules received two additional 

comment letters that were not received by the OCC; 

however, the OCC has considered and addressed 

those comments in this SUPPLEMENTARY INFORMATION

section. One comment suggested that the agencies 

extend the comment period. The OCC concluded 

that a longer comment period was not necessary, 

and an extension of the comment period is not 

legally required. 

24 GAO, Anti-Money Laundering: Opportunities 

Exist to Increase Law Enforcement Use of Bank 

Secrecy Act Reports, and Banks’ Costs to Comply 

with the Act Varied (Sept. 22, 2020), available at 

https://www.gao.gov/products/gao-20-574. 

25See also 12 U.S.C. 1463(a)(2). 

26 12 U.S.C. 1. 

27 GAO, Anti-Money Laundering: Opportunities 

Exist to Increase Law Enforcement Use of Bank 

Secrecy Act Reports, and Banks’ Costs to Comply 

with the Act Varied (Sept. 22, 2020), available at 

https://www.gao.gov/products/gao-20-574. 

28See OCC Interpretive Letter 1166 (Sept. 27, 

2019) (recognizing automated SAR generation as 

consistent with SAR regulation). 

29 31 U.S.C. 5311; 12 U.S.C. 1818(s)(1) (‘‘Each 

appropriate Federal banking agency shall prescribe 

regulations requiring insured depository 

institutions to establish and maintain procedures 

reasonably designed to assure and monitor the 

compliance of such depository institutions with the 

requirements of subchapter II of chapter 53 of Title 

31.’’). 

proposed changes to those reports to 

reduce unnecessary burdens while 

ensuring that the reports continue to 

serve their intended purpose. Certain 

provisions of the AMLA of 2020 may 

require the OCC to apply SAR 

requirements in ways that may 

potentially conflict with the OCC’s 

current SAR regulation. While FinCEN 

has authority to address conflicts 

between the AMLA of 2020 and 

FinCEN’s regulations, either through 

FinCEN’s preexisting exemption 

authority or through authority granted 

by the AMLA of 2020, the OCC’s SAR 

regulations do not expressly permit 

parallel exemptions. For example, 

FinCEN’s pilot program on SAR sharing 

might allow sharing of SARs in ways 

that would arguably be inconsistent 

with the OCC’s requirements on SAR 

confidentiality.21 The OCC’s adoption of 

exemption authority in its SAR 

regulation will remove any legal 

uncertainty related to national banks 

and Federal savings associations 

participation in such FinCEN programs. 

III. The Proposal and Final Rule 

The proposed rule would have 

allowed the OCC to issue exemptions 

from the requirements of its SAR 

regulations. Specifically, the proposed 

rule would have added 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 requirements 

in those regulatory provisions. The OCC 

is finalizing the proposed rule with 

some modifications, which are 

described below.22

IV. Comments 

The OCC received seven comments on 

its proposed rule.23 Some commenters 

supported the proposed rule while 

others opposed it. Some commenters 

noted that they support a regulatory 

framework that encourages innovation 

and that the proposed rule would foster 

responsible innovation and improve the 

quality of reporting over time. 

A. Comments Opposing the Proposed 

Rule 

Commenters opposing the proposed 

rule asserted that the proposed rule 

provided no persuasive justification or 

authority to issue an exemption. These 

commenters also suggested that the 

history of money laundering and SAR 

deficiencies at major financial 

institutions is inconsistent with the 

OCC adopting exemptions to the SAR 

requirements. Commenters opposing the 

proposed rule also noted that criminals 

may seek out financial institutions that 

have been granted exemptions and that 

the proposed rule may jeopardize U.S. 

officials’ access to a key investigative 

tool. Also, according to these 

commenters, the rule should address a 

significant Government Accountability 

Office (GAO) report on SARs and 

CTRs.24

The OCC has evaluated these 

concerns and does not believe the final 

rule will weaken reporting processes. 

The amendments in the final rule will 

conform the OCC’s exemption authority 

to FinCEN’s exemption authority. The 

OCC’s SAR regulations and FinCEN’s 

SAR regulation feature significant 

overlap. Many SARs are required to be 

filed by both FinCEN’s SAR regulation 

and the OCC’s SAR regulations. The 

final rule will only allow the OCC to 

issue exemptions from the requirements 

of the OCC’s SAR regulations. Under the 

final rule, national banks and Federal 

savings associations will continue to be 

required to comply with FinCEN’s SAR 

regulation. For requests requiring 

separate FinCEN and OCC approvals, 

the OCC intends to coordinate with 

FinCEN, and FinCEN would have to 

issue a parallel exemption. Currently, if 

FinCEN issues an exemption or uses 

other authority to modify the 

application of the requirements of its 

SAR regulations, the OCC may not be 

able to issue a parallel exemption. 

The final rule will maintain national 

banks’ and Federal savings associations’ 

core reporting responsibilities. The final 

rule’s exemption authority, like 

FinCEN’s exemption authority, is 

drafted broadly and flexibly to handle 

unexpected situations. However, the 

OCC does not expect to use this 

exemption authority to issue sweeping 

exemptions that would undermine the 

value provided by SARs. The final rule 

includes factors the OCC will consider 

before granting an exemption, which 

will help ensure that any exemptions 

are appropriate. 

While some commenters suggested 

that the OCC lacks legal authority to 

issue the final rule, as discussed above, 

the OCC has broad statutory authority to 

issue regulations for national banks and 

Federal savings associations. For 

example, 12 U.S.C. 161 provides that 

the Comptroller may call for ‘‘special 

reports’’ and 12 U.S.C. 93a provides that 

the Comptroller ‘‘is authorized to 

prescribe rules and regulations to carry 

out the responsibilities of the office.’’ 25

The OCC has long viewed SAR 

requirements and their predecessor 

reporting requirements to be part of the 

OCC’s mission of assuring safety and 

soundness.26 The OCC’s legal authority 

to require reports includes the authority 

to modify reporting requirements and 

issue exemptions, if appropriate. 

One commenter suggested that the 

OCC consider GAO’s 2020 report on 

anti-money laundering compliance.27

The OCC considered this report, which 

recommended that FinCEN better 

support the use of SARs by law 

enforcement. This final rule will not 

affect the mechanisms that law 

enforcement agencies use to access 

SARs. Also, the OCC could approve 

exemptions that would result in 

additional SARs being filed, for 

example, through the use of 

automation.28 The OCC will consider 

whether any exemption request is 

consistent with the purposes of the 

BSA, and these purposes include 

requiring reports or records that are 

‘‘highly useful’’ in ‘‘criminal, tax, or 

regulatory investigations.’’ 29

Accordingly, the OCC will consider the 

usefulness of potential SARs that would 

be affected by an exemption request. In 

determining whether an exemption 

request is consistent with the purposes 

of the Bank Secrecy Act, the OCC 

intends to consult with FinCEN, as 

appropriate. 

The exemption authority in the final 

rule is consistent with the OCC’s 

support for the reallocation of bank 


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30Section 6101(b)(2)(B)(ii), codified at 31 U.S.C. 

5318(h)(2)(B)(iv)(II). 

31The final rule, like the proposed rule, uses the 

term ‘‘exemption’’ while FinCEN’s exemption 

authority in 31 CFR 1010.970 uses both the terms 

‘‘exemption’’ and ‘‘exception.’’ The OCC does not 

believe there is a substantive distinction between 

exemptions and exceptions in this context. 

compliance resources to their most 

effective uses. The AMLA of 2020 

provided that compliance programs 

should ensure that ‘‘more attention and 

resources of financial institutions 

should be directed toward higher-risk 

customers and activities, consistent 

with the risk profile of a financial 

institution, rather than toward lower 

risk customers and activities.’’ 30

Accordingly, it may be appropriate to 

allow national banks and Federal 

savings associations to tailor their 

monitoring for suspicious activity so 

banks might not file SARs in certain 

specified situations involving lower risk 

customers and activities. The agencies’ 

SAR regulations already contemplate 

lower risk scenarios by having specific 

dollar thresholds below which financial 

institutions are not required to file 

SARs. Similarly, it is unlikely that 

criminals will target national banks and 

Federal savings associations that have 

received exemptions, as one commenter 

suggested, because the OCC does not 

expect to issue exemptions that would 

relieve national banks and Federal 

savings associations of their general 

obligation to monitor for suspicious 

activity or file appropriate SARs. The 

OCC will weigh any potential for 

criminals to target a national bank or 

Federal savings association in 

evaluating particular exemption 

requests. Should information come to 

light after the OCC approves an 

exemption that criminals are potentially 

targeting an institution because of its 

exemption, the final rule provides the 

OCC with authority, at its sole 

discretion, to revoke the exemption. 

Some commenters suggested that the 

proposal was not supported by adequate 

evidence and was therefore inconsistent 

with the requirements of the 

Administrative Procedure Act. One 

commenter argued that the proposed 

rule did not provide any data on costs 

or cost savings that might accrue at a 

financial institution if a SAR exemption 

were granted or on what financial 

institutions, if any, have requested SAR 

exemptions in the past. The commenter 

noted that the proposed rule estimates 

that only five financial institutions per 

year would request SAR exemptions but 

provided no basis in research or data for 

that prediction since it is possible that 

all financial institutions would want an 

exemption. 

The OCC acknowledges that it is 

difficult to predict exactly how many or 

what type of exemptions might be 

requested or ultimately granted. That is 

why the exemption language in the final 

rule, like FinCEN’s exemption language, 

is drafted broadly and flexibly. As 

discussed above, this rule is intended to 

make the limited changes necessary to 

match the exemption authority already 

possessed by FinCEN. The OCC is not 

committing to offer or grant any 

particular exemptions. The final rule 

only creates the authority to issue 

exemptions in the future. The proposed 

rule included an estimate of five 

exemption requests per year for 

purposes of the burden estimates 

required by the Paperwork Reduction 

Act. However, this estimate of future 

exemption requests is approximate and 

does not represent an estimate of 

exemption requests that the OCC 

expects to actually grant. The OCC will 

carefully examine any exemption 

requests received and may issue few or 

no exemptions if they do not satisfy the 

OCC’s scrutiny. 

B. Process for Issuing Exemptions 

The final rule contains some 

requirements that are not included in 

FinCEN’s SAR regulation. Under the 

final rule, for exemption requests 

involving OCC-only SAR requirements, 

a national bank or Federal savings 

association will be required to seek an 

exemption only from the OCC. For 

exemption requests that will 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), 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 will need 

to seek and obtain an exemption from 

both the OCC and FinCEN to be afforded 

exemptive relief.31

Commenters suggested that the OCC 

work together with the other Federal 

banking agencies and FinCEN to create 

one standard and one system for any 

institution to use when applying for an 

exemption. Similarly, commenters 

suggested that the OCC work together 

with the other Federal banking agencies 

and FinCEN to create a single-filing 

process whereby an OCC-supervised 

institution files solely with OCC and 

any need for a FinCEN approval 

involving the same application would 

be obtained by OCC. Commenters 

suggested that the agencies should 

streamline the application process so 

that it is only necessary to seek approval 

from a bank’s prudential regulator. 

Commenters recommended that the 

agencies not require institutions to 

duplicate work when multiple agencies’ 

approval is required. 

One commenter suggested that the 

agencies use an interagency rulemaking 

to create a single, streamlined SAR 

regulation that includes a process for 

obtaining an exemption. According to 

this commenter, when a bank requests 

an exemption, it should only have to 

submit a single application to its 

primary prudential supervisor and not 

multiple agencies. Other commenters 

recommended that the agencies provide 

templates of application forms or 

similar tools to facilitate applications. 

The OCC acknowledges the value of a 

simple, straightforward application 

process and the importance of 

coordination among the agencies 

administering SAR requirements. The 

agencies are currently coordinating and 

considering whether to provide specific 

forms or issue guidance describing 

application processes in more detail. 

However, the final rule only makes the 

limited textual changes to the OCC’s 

SAR regulations necessary to provide 

exemption authority paralleling 

FinCEN’s exemption authority. These 

limited changes do not preclude the 

OCC or other agencies from taking 

additional action later to streamline the 

process for requests for SAR 

exemptions. 

Under the final rule, for exemption 

requests involving OCC-only SAR 

requirements, a national bank or Federal 

savings association only needs to seek 

an exemption from the OCC. For 

exemption requests that also require an 

exemption from FinCEN’s SAR 

regulation, a national bank or Federal 

savings association will need to seek an 

exemption from both the OCC and 

FinCEN. 

One commenter suggested that the 

agencies reconcile differences between 

their SAR exemption proposals. The 

proposed rule provided that a national 

bank or 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.’’ The rules proposed by the 

Board, FDIC, and NCUA provided that 

those agencies would have sought 

FinCEN’s concurrence for any 

exemption request that will also require 

an exemption from FinCEN’s SAR 

regulations. The OCC’s final rule, like 

the proposed rule, does not specifically 

provide for concurrence from FinCEN, 

but this difference should not 

functionally affect applications for 

exemptions. Under the proposed rules 

of any of the agencies, financial 


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15328 Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Rules and Regulations 

32See, e.g., 12 CFR 5.45 and 5.46 (requiring prior 

approval for certain increases in capital). Separate 

licensing forms provide a mechanism for this 

approval, available at https://www.occ.gov/ 

publications-and-resources/publications/ 

comptrollers-licensing-manual/files/licensing-filingforms.html. 

33 31 CFR 1010.970(a). 

34 31 CFR 1020.220(b) (‘‘The Federal functional 

regulator and the Secretary shall consider whether 

the exemption is consistent with the purposes of 

the Bank Secrecy Act and with safe and sound 

banking, and may consider other appropriate 

factors.’’). 

institutions would have have been 

required to submit applications to both 

FinCEN and their functional regulator 

and receive approvals from both. 

The OCC intends to coordinate with 

the other agencies to develop 

standardized procedures or forms for 

handling certain exemption requests. 

This is consistent with past practice 

where the agencies have developed such 

processes or forms after issuing 

underlying regulations. For example, 

certain OCC regulations require OCC 

‘‘prior approval’’ before national banks 

and Federal savings associations take 

particular actions, and the OCC has 

separately issued the licensing forms 

and procedures necessary to obtain this 

approval.32 The final rule only makes 

the limited changes to the OCC’s SAR 

regulations necessary to clarify its 

authority to issue exemptions. 

Under the final rule, a national bank 

or Federal savings association 

requesting an exemption from the 

requirements of 12 CFR 21.11 or 12 CFR 

163.180 must submit a request in 

writing to the OCC. 

C. Standards for Issuing an Exemption 

The proposed rule listed separate 

factors that the OCC would consider for 

exemptions involving OCC-only 

exemptions versus exemptions that 

would also require exemptions from 

FinCEN. The final rule, however, 

provides a single set of factors that the 

OCC will consider for all exemption 

requests. Specifically, upon receipt of 

any exemption request, the OCC will 

consider whether the exemption is 

consistent with the purposes of the BSA 

and with safe and sound banking, and 

may consider other appropriate factors. 

Commenters raised a variety of 

concerns about these factors. One 

commenter stated that the proposed 

exemption authority contains no 

limitations or caveats and argued that 

the absence of additional standards, 

criteria, and procedures renders the 

proposed rule unworkable and 

susceptible to legal challenge. Similarly, 

this commenter stated that the proposed 

rule did not address how supervisory 

concerns related to BSA/AML 

deficiencies or a lower supervisory 

rating due to repeated deficiencies 

would affect the exemption process. The 

commenter also observed that the 

proposed rule provided no process for 

an internal supervisory review or audit 

of the SAR exemption decisions being 

made by the OCC, which raises 

concerns about consistent decisionmaking. Similarly, another commenter 

stated that the proposed rule is overly 

broad and could inadvertently permit 

the wholesale exemption of entire 

institutions or categories of institutions 

from SAR requirements. According to 

this commenter, the proposed rule does 

not provide concrete standards or a 

clear process, and the deficiencies could 

be exploited, running counter to the 

interests of financial transparency and 

anti-money laundering objectives. 

Another commenter suggested that 

the agencies specify additional factors 

they may consider when evaluating 

exemption requests. Specifically, the 

commenter suggested that the agencies 

should consider whether the bank’s 

exemption request would, if granted, 

improve law enforcement and other end 

users’ use of SAR data (e.g., the request 

increases submission speed and 

enhances data consistency) or allow the 

requesting bank to reallocate resources 

to higher value monitoring and 

reporting processes. Another commenter 

suggested that, in reviewing a request, 

the agencies should consider whether 

the exemption would, if granted, 

enhance usefulness to law enforcement 

and whether the exemption would, if 

granted, enable the institution to 

redeploy resources in a manner suitable 

for the institution. 

Another commenter expressed 

concern that the proposal’s singular 

focus on high-tech solutions will 

disadvantage small and mid-sized 

institutions that cannot afford, build, or 

implement such novel, innovative 

solutions to meet their SAR 

requirements. According to this 

commenter, smaller institutions still 

struggle under manual SAR processes 

and lower-tier technology. Another 

commenter stated that it was unclear 

how the proposed rule would cover 

other institutions besides traditional 

national banks and Federal savings 

associations, including branches and 

agencies of foreign banks, trust 

companies, and service corporations. 

Another commenter suggested that 

the agencies provide clear guidance 

governing how exemption requests will 

be evaluated and how the various 

considerations will be weighed, such as 

whether more weight will be given to 

broad machine learning applications 

and algorithms or whether the agencies 

will favor requests that focus on cost 

and time savings, regardless of technical 

sophistication. The commenter 

expressed concerns that requests 

submitted by small institutions may not 

be able to match the technology used by 

larger institutions. 

The OCC acknowledges the concerns 

raised by these commenters and expects 

to consider various potential factors 

when evaluating requests. However, it is 

difficult to anticipate every possible 

exemption request, and, as a 

consequence, rigid or inflexible 

procedures could limit the OCC’s future 

ability to consider, and deny or issue, 

exemptions. FinCEN’s regulation 

authorizing exemptions does not 

contain a prescribed list of factors that 

will be considered before exemptions 

are issued.33 Nor does FinCEN’s 

regulation describe the process FinCEN 

will use when evaluating an exemption 

request. It would create inconsistency 

and be potentially problematic for the 

OCC’s regulation to include factors or 

processes that are not included in 

FinCEN’s regulation. That would make 

the exemption provisions not truly 

parallel and could pose difficulties for 

financial institutions applying for 

exemptions. For example, financial 

institutions might have to submit 

different applications to the OCC and 

FinCEN to address different potential 

factors and processes. This would create 

an additional burden and would 

undermine the value of creating parallel 

exemption processes. 

The final rule contains a set of factors 

that the OCC will consider in reviewing 

all requests in addition to considering 

‘‘any other appropriate factor.’’ 

Specifically, the OCC will consider 

whether the exemption is consistent 

with the purposes of the BSA and with 

safe and sound banking, and may 

consider other appropriate factors. 

Although FinCEN’s general exemption 

provision, 31 CFR 1010.970(a), does not 

have these factors, these are the same 

factors that the OCC and FinCEN 

consider as part of exemption 

determinations involving customer 

identification program requirements.34

The OCC has determined that it is 

appropriate to commit to considering 

them in the context of suspicious 

activity reporting because they should 

be relevant to any request for an 

exemption. The OCC’s commitment to 

considering these factors should not 

promote inconsistency with FinCEN 

since the OCC does not expect FinCEN 

to issue exemptions that would be 

inconsistent with these factors. 

Requiring consideration of these factors 


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35The Uniform Financial Institutions Rating 

System, commonly referred to as the CAMELS 

rating system. 36https://www.occ.gov/topics/supervision-andexamination/responsible-innovation/indexresponsible-innovation.html. 

37 Joint Statement on Innovative Efforts to Combat 

Money Laundering and Terrorist Financing (Dec. 3, 

2018), available at https://www.occ.gov/newsissuances/news-releases/2018/nr-occ-2018- 

130a.pdf. 

38 31 CFR 1010.970. 

39See, e.g., 12 CFR 100.2 (‘‘The Comptroller of 

the Currency may, for good cause and to the extent 

permitted by statute, waive the applicability of any 

provision of parts 1 through 197 of this chapter I, 

as applicable, with respect to Federal savings 

associations.’’). Similarly, other FinCEN exemption 

provisions have not used language like this. See, 

e.g., 31 CFR 1020.220(b). 

will help ensure that any issued 

exemptions are appropriate. Although 

the OCC acknowledges the relevance of 

other factors raised by the commenters 

(such as the different technological 

resources of large versus small financial 

institutions), it is not appropriate or 

necessary to embed such factors into the 

regulation itself. Many of the additional 

factors suggested by commenters are 

already covered by the three factors in 

the final rule. 

The final rule provides that the OCC 

will consider ‘‘any other appropriate 

factors,’’ and the OCC expects to 

consider other factors that may be 

relevant to particular exemption 

requests. The OCC’s SAR regulations 

apply to all national banks and Federal 

savings associations, and the new 

exemption language will similarly cover 

all national banks and Federal savings 

associations. Although it is possible that 

the terms of certain exemptions may be 

tailored to particular types of national 

banks or Federal savings associations 

(for example, trust banks), the OCC will 

not pre-judge how exemptions may be 

applied to different types of national 

banks and Federal savings association. 

FinCEN’s exemption provision does not 

distinguish between different types of 

banking organizations, and it would be 

inconsistent for the OCC’s exemption 

provision to do this. The final rule, like 

the OCC’s SAR regulations, applies to 

Federal branches and agencies of foreign 

banks licensed or chartered by the OCC. 

In the proposed rule, the list of factors 

that the OCC would consider for 

exemption requests that would not 

require an exemption from FinCEN did 

not include considering whether the 

exemption was consistent with the 

purposes of the BSA. (The proposal 

included this factor for requests that 

would also require an exemption from 

FinCEN.) The reporting requirements 

now contained in the OCC’s SAR 

regulations predate the BSA and 

continue to be broader than FinCEN’s 

SAR requirements in certain ways (i.e., 

requiring SARs in certain situations that 

would not require SARs under FinCEN’s 

SAR regulation). However, the OCC 

agrees with the arguments made by 

certain commentators and has 

determined it is reasonable to consider 

whether any exemption request is 

consistent with the purposes of the 

BSA, regardless of whether the 

exemption request implicates FinCEN’s 

SAR regulation. The proposed rule 

explained how the BSA and successive 

legislation has shaped reporting 

requirements and developed the current 

SAR regime. Also, it could be 

inconsistent and confusing to consider 

separate sets of factors for OCC-only 

SAR exemptions versus requests 

requiring exemptions from both the 

OCC and FinCEN. The proposed rule 

specified that the OCC would consider 

any ‘‘appropriate factors,’’ and the OCC 

is now specifying that whether a request 

is consistent with the purposes of the 

BSA is such an appropriate factor for all 

exemption requests. The proposed rule 

explained the background and history of 

the SAR requirements and detailed the 

interaction between the OCC’s SAR 

requirements and the BSA, which 

establishes how the BSA is still relevant 

to OCC-only SAR requirements. 

Some commenters recommended that 

the OCC consider additional factors as 

part of exemption determinations. 

However, the final rule already covers 

many of the factors identified by 

commenters. One commenter suggested 

that the agencies should consider 

whether an exemption request will 

improve law enforcement and other 

BSA end users’ use of SAR data. 

However, the statutory purposes of the 

BSA include requiring reports that are 

‘‘highly useful’’ to various users of 

SARs, including law enforcement. 

Another commenter suggested that the 

proposed rule did not explain how 

supervisory concerns related to BSA/ 

AML deficiencies or a lower CAMELS 

rating 35 due to repeated deficiencies 

would affect the exemption process. 

Those supervisory concerns would 

implicate all of the factors listed in the 

final rule. The OCC would not likely 

approve an exemption request when a 

national bank or Federal savings 

association previously failed to prevent 

money laundering or if granting the 

exemption could contribute to unsafe or 

unsound practices. ‘‘[O]ther appropriate 

factors’’ could also include outstanding 

supervisory concerns regarding BSA/ 

AML compliance. 

The OCC and other agencies have 

already provided guidance on the 

principles relevant to responsible 

innovation that are applicable to 

innovative approaches for complying 

with SAR requirements. Specifically, 

the OCC has ‘‘define[d] Responsible 

Innovation as the use of new or 

improved financial products, services 

and processes to meet the evolving 

needs of consumers, businesses, and 

communities in a manner that is 

consistent with sound risk management 

and is aligned with the bank’s overall 

business strategy.’’ 36 Similarly, in 2018 

FinCEN and the Federal banking 

agencies issued a statement encouraging 

banks to take innovative approaches to 

meet their BSA/AML compliance 

obligations.37 That statement explained 

that banks are encouraged to consider, 

evaluate, and, when appropriate, 

responsibly implement innovative SAR 

compliance approaches. 

Pursuant to the final rule, a national 

bank or Federal savings association 

requesting an exemption from the 

requirements of the OCC’s SAR 

regulations will have to submit a request 

in writing to the OCC (and potentially 

also to FinCEN). Upon receiving a 

written request from a national bank or 

Federal savings association, the OCC 

will consider the request and provide a 

written response. 

The OCC may notify the other Federal 

banking agencies or FinCEN and 

consider their comments before granting 

any exemption. The final rule provides 

that the OCC may grant an exemption 

for a specified time period. One 

commenter stated that the proposed 

rule’s broad statement that it ‘‘may be 

conditional or unconditional, may apply 

to particular persons or to classes of 

persons, and may apply to transactions 

or classes of transactions’’ offered no 

guidance on the menu of available relief 

measures or which measures should be 

used in which circumstances. This 

language arises from the regulation that 

includes FinCEN’s exemption 

authority.38 The OCC removed this 

language from the final rule to avoid any 

confusion and because the OCC has not 

used language like this in exemption 

provisions in other regulations.39 The 

removal of this language should not 

have any substantive effect in the 

context of the OCC’s SAR regulations or 

limit the OCC’s ability to issue 

exemptions. 

D. Issuance of Exemptions, Publication, 

and Modifications 

The proposed rule provided that the 

OCC would provide a written response 

to a national bank or Federal savings 

association that submits an exemption 

request. Commenters suggested that the 

OCC provide a clear timeline for 

responding to a request for an 


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40See ‘‘Joint Interagency Statement on Innovative 

Efforts to Combat Money Laundering and Terrorist 

Financing 2,’’ (Dec. 3, 2018), available at https://

www.occ.gov/news-issuances/news-releases/2018/ 

nr-occ-2018-130a.pdf. 41 31 CFR 1010.970(a). 

exemption, for example 30 days or 45 

days. Several commenters suggested 

that the OCC should publish approved 

exemption decisions so that other 

financial institutions are aware of the 

OCC’s analysis regarding a particular 

process or new technology (and would 

not have to apply separately for 

exemptions). One commenter 

recommended that the agencies clarify 

how they will handle requests may 

contain trade secrets, proprietary 

information, and other sensitive 

business information. 

The OCC recognizes the value of a 

timely, transparent review and decision 

process, and the OCC, in consultation 

with the other agencies, may develop 

standardized timelines for the 

consideration of requests or the 

publication of any exemptions. 

However, at present, including such 

procedures within the OCC’s regulation 

would be inconsistent with FinCEN’s 

exemption regulation. The OCC, in 

consultation with the other agencies, 

also is reviewing and potentially 

revising SAR requirements as part of 

changes made by the AMLA of 2020. 

The OCC, in consultation with the other 

agencies, may refine SAR requirements 

in ways that align with the commenters’ 

concerns, but it is not possible to make 

these commitments while other 

potential SAR changes are still ongoing. 

This final rule only makes the limited 

and incremental changes necessary for 

the OCC’s exemption authority to be 

consistent with FinCEN’s rule. The OCC 

routinely handles sensitive or 

confidential information submitted by 

national banks and Federal savings 

associations, and the OCC expects to 

follow appropriate protocols in 

handling any such information 

submitted along with exemption 

requests. 

The OCC acknowledges commenters’ 

concerns about making approved 

exemptions public and transparent. The 

final rule does not resolve whether or 

not the OCC will publish approved 

exemptions or redacted versions of 

them. The OCC expects to determine 

whether publication is appropriate in 

the course of developing standardized 

procedures for handling exemptions and 

in coordination with FinCEN and the 

other Federal banking agencies. The 

OCC also notes that, to the extent that 

an exemption request involves a 

substantive legal interpretation or 

action, such determinations are 

regularly published by the OCC with 

appropriate redactions. 

Several comments addressed the 

process for issuing an exemption, 

including recommending governance 

mechanisms to ensure the 

accountability of OCC officials making 

exemption decisions. The OCC takes 

such process concerns seriously but 

does not believe it is appropriate to 

address them in this regulation. The 

OCC has separate governance 

mechanisms to address the appropriate 

delegation of authority within its 

organizational structure. It would be 

anomalous to embed additional internal 

rules of agency procedure within the 

OCC’s SAR regulations. Additionally, 

such process requirements would be 

inconsistent with FinCEN’s exemption 

provision and would undermine the 

value of consistent exemption 

provisions. 

One commenter recommended that 

the agencies should make it clear that 

banks are not required to run parallel 

systems by running both their existing 

process and the innovative process 

simultaneously. Although the OCC 

expects to resolve this issue in specific 

exemption requests, the OCC notes that 

the Interagency Statement on Innovative 

Efforts to Combat Money Laundering 

and Terrorist Financing states ‘‘that 

pilot programs undertaken by banks, in 

conjunction with existing BSA/AML 

processes, are an important means of 

testing and validating the effectiveness 

of innovative approaches.’’ 40

Under the proposed rule, the OCC 

also could have revoked previously 

granted exemptions. The proposed rule 

provided that the OCC would provide 

written notice to a national bank or 

Federal savings association of the OCC’s 

intention to revoke an exemption. The 

notice would have included the basis 

for the revocation and would provide an 

opportunity for the national bank or 

Federal savings association to submit a 

response to the OCC. One commenter 

stated that the proposed rule offers no 

standards or criteria for determining 

when to extend or revoke a SAR 

exemption. Another commenter 

suggested that the OCC create an appeal 

process so an applicant may make 

changes and re-submit without having 

to completely re-apply for an 

exemption. One commenter 

recommended giving financial 

institutions a timeline for revocation so 

they have the opportunity to prepare 

and re-direct resources. Another 

commenter recommended that, before 

an exemption is revoked, the agencies 

should provide reasonable notice to 

allow the institution ample time to 

reinstitute and test their pre-existing 

SAR monitoring processes. Another 

commenter recommended that the rule’s 

procedures should include an appeal 

mechanism or second review so that a 

denied application can be revised or 

amended to address any objections 

raised by an agency. Another 

commenter suggested that the agencies 

should provide a sufficient timeline 

before revoking an exemption. 

The OCC is finalizing the revocation 

provisions as proposed. FinCEN’s 

exemption provision provides that 

exemptions ‘‘shall be revocable in the 

sole discretion of the Secretary.’’ 41 The 

OCC similarly believes it is appropriate 

to communicate in the final rule that 

exemptions are not permanent and may 

be revoked. Although the OCC 

recognizes the potential value of the 

additional procedures or checks 

suggested by the commenters (for 

example, an appeal mechanism), it is 

unnecessary to include such features 

and internal processes in the regulation. 

The final rule provides for an 

opportunity for notice and response 

before revocation, which would 

promote fairness and due process. In 

addition, additional procedures or 

checks would be inconsistent with 

FinCEN’s regulation. To support a 

coordinated regulatory response, the 

OCC intends to cooperate with FinCEN 

when considering whether to revoke an 

exemption, to the extent possible. 

Although the OCC plans to carefully 

evaluate exemption requests so as to 

avoid where possible the need for 

revocation, it would be inappropriate to 

add other mandatory pre-revocation 

procedures because the procedures 

could interfere with the potential need 

for expedited revocation. 

E. Other Comments 

Several commenters raised issues not 

directly relevant to this rulemaking. One 

commenter supported a broader effort to 

review and harmonize supervisory 

expectations, perhaps even through a 

single rulemaking. Another commenter 

supported other efforts to improve SAR 

regulations, including a streamlined 

form, narrative improvements, and 

reporting thresholds. Another 

commenter recommended that the 

agencies recognize the new priorities in 

the AMLA of 2020, including the goal 

to update and modernize the overall 

AML system. One commenter suggested 

that the agencies change the focus in 

their proposed rules to recognize that 

the goal is providing useful information 

for law enforcement through the riskbased approach while also protecting 

the financial institution and confidence 

in the banking system. 


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42 5 U.S.C. 801 et seq. 

43 5 U.S.C. 801(a)(3). 

44 5 U.S.C. 804(2). 

45Public Law 106–102, sec. 722, 113 Stat. 1338, 

1471 (1999), codified at 12 U.S.C. 4809. 

46Consistent with the General Principles of 

Affiliation 13 CFR 121.103(a), the OCC counts the 

assets of affiliated financial institutions when 

determining whether it should classify an 

institution as a small entity. The OCC used 

December 31, 2020, to determine size because a 

‘‘financial institution’s assets are determined by 

averaging the assets reported on its four quarterly 

financial statements for the preceding year.’’ See 

footnote 8 of the U.S. Small Business 

Administration’s Table of Size Standards. 

47 12 U.S.C. 4802(b). 

The OCC is undertaking reviews of, 

and potentially changes to, reporting 

requirements as part of implementing 

the AMLA of 2020. The OCC will 

evaluate these comments in the context 

of this broader review of SAR 

requirements and AML requirements 

generally. This final rule only makes the 

limited, incremental changes necessary 

to conform the OCC’s SAR exemption 

authority to FinCEN’s. 

V. Administrative Law Matters 

A. Congressional Review Act 

For purposes of the Congressional 

Review Act, the Office of Management 

and Budget (OMB) makes a 

determination as to whether a final rule 

constitutes a ‘‘major’’ rule.42 If OMB 

deems a final rule is ‘‘major,’’ the 

Congressional Review Act generally 

provides that the rule may not take 

effect until at least 60 days following its 

publication.43 The Congressional 

Review Act defines a ‘‘major rule’’ as 

any rule that the Administrator of the 

Office of Information and Regulatory 

Affairs of the OMB finds has resulted in 

or is likely to result in (1) an annual 

effect on the economy of $100 million 

or more; (2) a major increase in costs or 

prices for consumers, individual 

industries, Federal, state, or local 

government agencies or geographic 

regions, or (3) a significant adverse 

effects on competition, employment, 

investment, productivity, innovation, or 

on the ability of U.S.-based enterprises 

to compete with foreign-based 

enterprises in domestic and export 

markets.44 As required by the 

Congressional Review Act, the OCC will 

submit the final rule and other 

appropriate reports to Congress and the 

GAO for review. 

B. Solicitation of Comments and Use of 

Plain Language 

Section 722 of the Gramm-LeachBliley Act 45 requires the Federal 

banking agencies to use plain language 

in all proposed and final rules 

published after January 1, 2000. The 

agencies sought to present the final rule 

in a simple, straightforward manner and 

did not receive any comments on the 

use of plain language in the proposed 

rule. 

C. Paperwork Reduction Act 

Certain provisions of the final rule 

contain are a ‘‘collection of 

information’’ within the meaning of the 

Paperwork Reduction Act (PRA) of 1995 

(44 U.S.C. 3501–3521). In accordance 

with the act’s requirements, agencies 

may not conduct or sponsor, and a 

respondent is not required to respond 

to, an information collection unless it 

displays a currently valid OMB control 

number. The OCC reviewed the rule and 

determined that it revises information 

collection requirements previously 

approved by the OMB under OMB 

Control No. 1557–0180. The OCC 

submitted the revised information 

collection to the 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 1320). 

Current Actions. The rule revises 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 national banks and 

Federal savings associations that might 

request exemptions each year and the 

estimated number of hours required to 

submit a request. 

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. 

D. Regulatory Flexibility Act 

In general, the Regulatory Flexibility 

Act (RFA) (5 U.S.C. 601 et seq.) requires 

an agency, in connection with a final 

rule, to prepare a final regulatory 

flexibility analysis describing the rule’s 

impact on small entities (defined by the 

Small Business Administration for 

purposes of the RFA to include 

commercial banks and savings 

institutions with total assets of $600 

million or less and trust companies with 

total assets of $41.5 million or less). 

However, under section 605(b) of the 

RFA, this analysis is not required if an 

agency certifies that the 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 rule. 

The OCC currently supervises 

approximately 1,117 institutions 

(national banks, trust companies, 

Federal savings associations, and 

branches or agencies of foreign banks, 

collectively banks), of which 669 are 

small entities.46 Because the final rule 

imposes no new mandates, it will have 

only de minimis costs to OCCsupervised small entities. Therefore, the 

OCC certifies that the final rule will not 

have a significant economic impact on 

a substantial number of small entities. 

Accordingly, a final regulatory 

flexibility analysis is not required. 

E. Riegle Community Development and 

Regulatory Improvement Act of 1994 

Pursuant to section 302(a) of the 

Riegle Community Development and 

Regulatory Improvement Act (RCDRIA) 

of 1994 (12 U.S.C. 4802(a)) in 

determining the effective date and 

administrative compliance requirements 

for new regulations that impose 

additional reporting, disclosure, or other 

requirements on insured depository 

institutions, the OCC must consider, 

consistent with principles of safety and 

soundness and the public interest (1) 

any administrative burdens that the 

final rule would place on depository 

institutions, including small depository 

institutions and customers of depository 

institutions, and (2) the benefits of the 

final rule. 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.47 The OCC considered the 

changes made by this final rule and 

believes that the effective date of May 1, 

2022, will provide OCC-regulated 

institutions with adequate time to 

comply with the rule. The final rule will 

not impose any new administrative 

compliance requirements, and the OCC 

believes that the burdens of preparing a 

request for exemption are justified by 

the agency’s need to evaluate 

information and factors relevant to the 

exemption request and to promote 

consistency. 

F. OCC Unfunded Mandates Reform Act 

of 1995 

The OCC analyzed the final rule 

under the factors in the Unfunded 

Mandates Reform Act (UMRA) of 1995 


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15332 Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Rules and Regulations 

2 U.S.C. 1501 et seq. Under this 

analysis, the OCC considered whether 

the final 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 or more 

in any one year ($157 million as 

adjusted annually for inflation). The 

UMRA does not apply to regulations 

that incorporate requirements 

specifically set forth in law. 

The final rule will not impose new 

mandates on any national banks or 

Federal savings associations. Therefore, 

the OCC concludes that the final rule 

will not result in an expenditure of $157 

million or more annually by state, local, 

and tribal governments, or by the 

private sector. As a result, the OCC finds 

that the final rule does not trigger the 

UMRA cost threshold. Accordingly, the 

OCC has not prepared the written 

statement described in section 202 of 

the UMRA. 

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. 

Authority and Issuance 

For the reasons stated in the 

SUPPLEMENTARY INFORMATION, chapter I 

of title 12 of the Code of Federal 

Regulations is amended as follows: 

PART 21—MINIMUM SECURITY 

DEVICES AND PROCEDURES, 

REPORTS OF SUSPICIOUS 

ACTIVITIES, AND BANK SECRECY 

ACT COMPLIANCE PROGRAM 

■ 1. Revise the authority citation for part 

21 to read as follows: 

Authority: 12 U.S.C. 1, 93a, 161, 1462a, 

1463, 1464, 1818, 1881–1884, and 3401– 

3422; 31 U.S.C. 5318. 

■ 2. In § 21.11, add paragraph (m) to 

read as follows: 

§ 21.11 Suspicious Activity Report. 

* * * * * 

(m) Exemptions. (1) The Office of the 

Comptroller of the Currency (OCC) may 

grant a national bank an exemption 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 the 

purposes of the Bank Secrecy Act (if 

applicable) and safe and sound banking, 

and may consider other appropriate 

factors. Any exemption will apply only 

as expressly stated in the exemption. (A 

national bank requesting an exemption 

that also requires relief from the 

requirements of applicable regulations 

issued by the Department of the 

Treasury at 31 CFR chapter X must 

submit a request in writing to both the 

OCC and FinCEN for approval.) 

(2) The OCC will respond in writing 

to a national bank that submits a request 

pursuant to paragraph (m)(1) of this 

section after considering whether the 

exemption is consistent with the factors 

in paragraph (m)(1) of this section. Any 

exemption granted by the OCC under 

paragraph (m)(1) of this section will 

continue for the time specified by the 

OCC. 

(3) The OCC may extend the period of 

time or may revoke an exemption 

granted under paragraph (m)(1) of this 

section. Exemptions or extensions may 

be revoked in the sole discretion of the 

OCC. Before revoking an exemption, 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 any 

response before deciding whether or not 

to revoke an exemption and provide 

written notice to the national bank of 

the OCC’s final decision to revoke an 

exemption. 

(4) With respect to requests for 

exemptions that will also require relief 

from the requirements of applicable 

regulations issued by the Department of 

the Treasury at 31 CFR chapter X, upon 

receiving approval from both the OCC 

and FinCEN, the requestor will be 

relieved of its obligations under this 

section to the extent stated in such 

approvals. 

PART 163—SAVINGS 

ASSOCIATIONS—OPERATIONS 

■ 3. Revise the authority citation for part 

163 to read as follows: 

Authority: 12 U.S.C. 1, 93a, 1462a, 1463, 

1464, 1467a, 1817, 1820, 1828, 1831o, 3806, 

5101 et seq., 5412(b)(2)(B); 31 U.S.C. 5318; 42 

U.S.C. 4106. 

■ 4. 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 

grant a Federal savings association or 

service corporation an exemption from 

the requirements of this section. A 

Federal savings association or service 

corporation 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 the 

purposes of the Bank Secrecy Act (if 

applicable) and safe and sound banking, 

and may consider other appropriate 

factors. Any exemption will apply only 

as expressly stated in the exemption. (A 

Federal savings association or service 

corporation requesting an exemption 

that also requires relief from the 

requirements of applicable regulations 

issued by the Department of the 

Treasury at 31 CFR chapter X must 

submit a request in writing to both the 

OCC and FinCEN for approval.) 

(2) The OCC will respond in writing 

to the Federal savings association or 

service corporation that submits a 

request pursuant to paragraph (f)(1) of 

this section after considering whether 

the exemption is consistent with the 

factors in paragraph (f)(1) of this section. 

Any exemption granted by the OCC 

under paragraph (f)(1) of this section 

will continue for the time specified by 

the OCC. 

(3) The OCC may extend the period of 

time or may revoke an exemption 

granted under paragraph (f)(1) of this 

section. Exemptions or extensions may 

be revoked in the sole discretion of the 

OCC. Before revoking an exemption, the 

OCC will provide written notice to the 

Federal 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 

Federal savings association or service 

corporation to submit a response to the 

OCC. The OCC will consider any 

response before deciding whether or not 

to revoke an exemption and provide 

written notice to the Federal savings 

association or service corporation of the 

OCC’s final decision to revoke an 

exemption. 

(4) With respect to requests for 

exemptions that will also require relief 

from the requirements of applicable 

regulations issued by the Department of 

the Treasury at 31 CFR chapter X, upon 

receiving approval from both the OCC 

and FinCEN, the requestor will be 

relieved of its obligations under this 

section to the extent stated in such 

approvals. 

Michael J. Hsu, 

Acting Comptroller of the Currency. 

[FR Doc. 2022–05521 Filed 3–17–22; 8:45 am] 

BILLING CODE 4810–33–P 


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