FinCEN Publishes FAQs to Reduce Certain Compliance Burdens Associated with SAR Filings
On October 9, 2025, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”), jointly with the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency, issued responses to four Frequently Asked Questions (the “FAQs”) about suspicious activity reporting requirements. Specifically, the FAQs clarify and interpret requirements relating to suspicious activity reports (“SARs”) on structuring arrangements, continuing activity reviews after filing a SAR, and documentation of a financial institution’s decision not to file a SAR.1
In the press release announcing the FAQs, FinCEN commented that it is “ensuring financial institutions are not needlessly expending resources on efforts that do not provide law enforcement and national security agencies with the critical information they need to detect, combat, and deter criminal activity.” FinCEN emphasizes that it seeks to continue to reform the Anti-Money Laundering and Countering the Financing of Terrorism (“AML/CFT”) framework to de-prioritize low-value activity and direct compliance resources towards the most significant threats.2
This Legal Update provides background regarding financial institutions’ SAR filing obligations, addresses recent updates regarding FinCEN’s efforts to reduce costs and anti-money laundering (“AML”) compliance burden, and provides a summary of FinCEN’s FAQs regarding SARs.
Background
The Bank Secrecy Act (“BSA”) requires certain financial intuitions operating in the United States, including banks, money services businesses (“MSBs”), broker-dealers, insurance companies, and residential mortgage lenders and originators, to file SARs with FinCEN. A financial institution generally must report any transaction that is conducted or attempted by, at, or through the financial institution and involves or aggregates at least $5,000 (or $2,000 for MSBs), and that the financial institution knows, suspects, or has reason to suspect that the transaction is related to certain types of suspicious activity outlined in the BSA and its implementing regulations.3
For many years, the financial services sector has highlighted the significant costs of AML compliance, including the burden involved in the process of filing a SAR. Presently, FinCEN appears receptive to such concerns and is considering reducing some of the burden. On September 30, 2025, FinCEN issued a request for information (“AML Survey”) on the costs that nonbank financial institutions (“NBFIs”) incur to comply with AML requirements. FinCEN stated that the responses to the AML Survey will be used to shape deregulatory proposals, consistent with the Executive Orders of the current administration. For more information regarding the AML Survey, please see our recent Legal Update.
On October 9, 2025, FinCEN released the FAQs addressing (bank and non-bank) financial institutions’ SAR filing obligations. As discussed in detail below, the FAQs clarify that certain guidance previously issued by FinCEN is not indicative of a regulatory expectation or requirement, and FinCEN seeks to reduce some of the burdens associated with SAR filings so that financial institutions can direct resources towards high-value compliance activities.
FinCEN’s FAQs
The FAQs address the following topics related to SAR filings:
1. SAR Filings for Potential Structuring-related Activity. FinCEN clarifies that the mere presence of a transaction or series of transactions at or near the $10,000 Currency Transaction Report (“CTR”) threshold is not sufficient information to require the filing of a SAR. Financial institutions are only required to file a SAR if the institution knows, suspects, or has reason to suspect that the transaction or series of transactions are designed to evade CTR reporting requirements. Absent this knowledge, suspicion, or reason to suspect, financial institutions are not required to file a SAR.
FinCEN notes that attempting to evade CTR reporting requirements—known as “structuring”—may be indicative of underlying illegal activity and is unlawful under the BSA. A financial institution’s AML/CFT program should be designed to detect and report structuring, and financial institutions should ensure they are compliant with SAR requirements under the BSA. The extent to which a financial institution must monitor for suspicious activity should be commensurate with the level of money laundering and terrorist financing risk of the specific institution.
2. Continuing Activity Review. FinCEN clarifies that financial institutions are not required to conduct a review of a customer or account following the filing of a SAR to determine whether suspicious activity has continued. FinCEN acknowledges that, in October 2000, it had suggested that institutions should file a SAR for repeated and ongoing suspicious activity at least every 90 days, and over time, this suggestion had become interpreted as a requirement or expectation. Financial institutions instead may rely on policies, procedures, and controls reasonably designed to identify, monitor, and report suspicious activity as appropriate.
This helpful clarification is consistent with FinCEN’s efforts to permit financial institutions to focus AML compliance resources on high-value activities. Financial institutions may still continue to monitor customers or accounts that have been the subject of a SAR and file additional SARs on a case-by-case basis, to the extent the risks presented by a given customer or account warrant additional scrutiny. Such efforts may be appropriate in the context of the BSA’s overall risk-based AML program requirements and serve to protect the U.S. financial system and the institution itself.
3. Timeline of Continuing Activity Reviews. As noted above, FinCEN previously suggested that financial institutions report continuing suspicious activity via a SAR filing at least every 90 days. Subsequent FinCEN guidance advised financial institutions to file SARs for continuing activity after a 90-day period, with the filing deadline being 120 calendar days after the date of the previous, related SAR filing. However, FinCEN clarifies in the FAQs that financial institutions are not required to do so and may instead file SARs as appropriate in line with applicable timelines.
That said, FinCEN indicates that financial institutions may elect to file SARs in accordance with FinCEN’s prior continuing suspicious activity guidance. FinCEN states that, when a financial institution files a SAR for continuing activity, Item 30 on the SAR form (the date or date range of suspicious activity) should include the entire 90-day period starting on the date immediately following the filing of the initial SAR or the date following the end of the previous 90-day period.
4. No SAR Documentation. FinCEN states that there is no requirement or expectation under the BSA or its implementing regulations for a financial institution to document its decision not to file a SAR. FinCEN clarifies that it has previously encouraged, but not required, financial institutions to document the decision not to file a SAR.
If a financial institution chooses to document its decision not to file a SAR, the level of appropriate documentation may vary based on the specifics of the activity being reviewed. FinCEN also emphasizes that financial institutions need not exceed that which is necessary for the institution’s internal policies, procedures, and controls, which should be risk-based and reasonably designed to identify and report suspicious activity. FinCEN states that, in most cases, a short, concise statement documenting a financial institution’s SAR decision will likely suffice. However, a financial institution may consider more documentation to explain the factors that the institution considered in more complex investigation scenarios.
While FinCEN’s FAQ explains that there is no legal requirement or expectation for a financial institution to document its decision not to file a SAR, financial institutions should carefully consider the potential implications of not maintaining such documentation. In order to future-proof itself from potential questions raised by regulators in the course of examinations and investigations, each financial institution should consider implementing best practices that protect the financial institution and decide how much documentation should be maintained on a risk basis.
Takeaways
FinCEN’s publication of FAQs focused on reducing the compliance burden associated with SAR filings indicates a willingness to continue evaluating the balance between financial institutions’ compliance burden and the utility of SAR information to law enforcement, including by revisiting long-established guidance and practices. Accordingly, financial institutions may continue to see—and to seek—guidance from FinCEN and proposed legislation that provides relief to financial institutions from some of the more onerous and low-yield reporting activity that has not proved as valuable to law enforcement agencies. Financial institutions should continue to prioritize maintaining internal policies, procedures, and controls that are reasonably designed to identify and report suspicious activity and monitor updates from FinCEN as to the application of specific requirements and their integration within financial institutions’ systems and processes.
1 FinCEN, “Frequently Asked Questions Regarding Suspicious Activity Reporting Requirements,” (Oct. 9, 2025).
2 Press Release, “FinCEN Issues Frequently Asked Questions to Clarify Suspicious Activity Reporting Requirements,” (Oct. 9, 2025).
3 Recently proposed legislation in Congress would raise the thresholds for filing SARs and currency transaction reports. For example, the Streamlining Transaction Reporting and Ensuring Anti-Money Laundering Improvements for a New Era Act (STREAMLINE Act) would raise the $2,000 SAR filing threshold for MSBs to $3,000 and the $5,000 threshold for other financial institutions to $10,000.
