Top 7 Tips for Filing SARs: A Guide for Credit Union Compliance

Suspicious Activity Reports (SARs) are an essential part of financial institutions’ compliance with anti-money laundering (AML) regulations.

For credit unions, filing accurate and timely SARs not only ensures compliance but also helps safeguard the financial system against fraud, money laundering, and other illegal activities.

However, the SAR process can often feel daunting due to the complexity of tracking, identifying, and documenting suspicious activity. To streamline your SAR filing process and improve effectiveness, here are seven expert tips for credit unions.

7 SAR Tips for Credit Union

To help simplify your SAR process, here are seven expert tips every credit union can follow.

1. Know the Red Flags

The first step in effective SAR reporting is identifying suspicious activity. Familiarize your team with key red flags, such as:

• Large cash deposits or withdrawals inconsistent with the member's typical behavior.
• Unexplained transfers to high-risk regions or unknown entities.
• Rapid movement of funds through multiple accounts in quick succession.
• Structuring transactions to avoid reporting thresholds.

Keeping a current list of red flags, updated with FinCEN’s advisories, ensures your credit union stays ahead of emerging risks. Regular training sessions for your team can reinforce awareness of these warning signs.

2. Use Clear, Concise Narratives

The narrative section of a Suspicious Activity Report (SAR) is where your credit union tells the story behind the suspicion. Think of it as the heart of the SAR—this is where you lay out the critical "who, what, when, where, and why" of a suspicious transaction or activity.

• Clearly state what happened, when, and why the activity is suspicious.
• Include specific details, such as transaction dates, amounts, and patterns.
• Avoid industry jargon; ensure the narrative is understandable for law enforcement.

A well-written SAR can significantly enhance the chances of the report being actionable.

3. Set Up Alerts for Monitoring

Invest in automated transaction monitoring systems to flag unusual activity. These systems can be tailored to your credit union’s risk profile and thresholds.

• Establish thresholds for cash transactions, international wires, and high-risk account activities.
• Regularly review and update your monitoring rules to adapt to new trends.

Automation reduces the risk of human error and helps your team focus on high-priority alerts.

4. Train Your Team Regularly

Compliance is a team effort. Ensure that all staff, from frontline employees to back-office personnel, are trained to recognize and escalate suspicious activity.

• Offer annual AML and SAR filing training.
• Include real-life examples to make the training relatable and practical.
• Encourage a culture where employees feel empowered to report concerns without hesitation.

A well-trained team is your first line of defense in preventing financial crimes.

5. Stay Within Deadlines

Timely filing is crucial for SARs. Per FinCEN regulations, SARs must be submitted within 30 calendar days of detecting suspicious activity.

Delays in filing can lead to penalties and missed opportunities to disrupt illegal activities.

6. Collaborate with Law Enforcement

SARs play a vital role in supporting law enforcement investigations. To make your SARs more useful:

• Provide as much relevant detail as possible.
• If appropriate, coordinate with law enforcement agencies about ongoing investigations.
• Respond promptly to requests for additional information.

Building a strong relationship with regulators and law enforcement helps establish your credit union as a proactive partner in fighting financial crime.

7. Perform Periodic Reviews of Filed SARs

Compliance is not a “file it and forget it” process. Periodically review previously filed SARs to:

• Identify recurring patterns involving the same accounts or members.
• Assess whether your credit union needs to file additional SARs or take further action.
• Enhance your internal controls based on lessons learned from past filings.

This proactive approach strengthens your overall compliance program and reduces risk.

Elevate Your Compliance with FLEX Compliance Services

Suspicious Activity Reports are a cornerstone of compliance for credit unions, ensuring adherence to the Bank Secrecy Act and protecting the financial system from abuse. 

Navigating compliance can be challenging, but you don't have to tackle it alone. FLEX is here to help. Download our Compliance Service eGuide today and discover how FLEX can empower your compliance team.