backOn October 9, 2025, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), along 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 four new frequently asked questions (FAQs) regarding suspicious activity reports (SARs). The new FAQs formalize remarks given by Treasury Under Secretary John Hurley last month and were issued to ensure that 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.
New FAQs
The four new FAQs provide AML compliance officers for covered financial institutions more discretion in the decision-making process for filing SARs. More specifically, the FAQs relate to structuring activity that forms the basis for the filing of SARs, continuing activity reviews, and decisions to not file SARs, providing the following clarifications for financial institutions:
- A transaction, or multiple transactions, with a value at or near the currency transaction reporting (CTR) threshold (i.e., over $10,000), without more or on its own, does not require a SAR. A SAR is required only if the financial institution knows, suspects, or has reason to suspect that the transaction or series of transactions is designed to evade CTR reporting requirements (i.e., structuring-related activity).
- Financial institutions do not have to conduct a review every 90 days after filing a SAR to determine whether suspicious activity has continued. Instead, financial institutions should consider implementing a risk-based approach to such monitoring, rather than automatically performing continuing activity reviews for all SARs.
- The timeline for financial institutions filing a SAR for continuing activity is not subject to a 120-calendar day requirement after the date of the previously related SAR filing. FinCEN notes that its prior guidance, focusing on 90 and 120-day periods, were guideposts to assist financial institutions when the reported conduct was continuing. FinCEN’s FAQ now states that financial institutions may choose to follow the FinCEN 120-day suggested timeline, or they may file them in line with applicable timelines in the rules. If a financial institution chooses to follow FinCEN’s 120-day guidance, the FAQ includes a specific timeline for the interim steps in situations where the subject of the SAR is known to the financial institution.
- Financial institutions do not have to document their decision to not file a SAR.
Analysis
Apart from the burdens placed on regulated entities, FinCEN and the prudential regulators are inundated with unnecessary SARs, including “defensive” SARs, which make it more difficult for the regulators and law enforcement to combat money laundering and illicit terrorist financing. The new FAQs emphasize that financial institutions should take a risk-based approach to their SAR-related policies, procedures, and controls to ensure they are reasonably designed to identify and report illegal activity.
While the new FAQs reflect a more streamlined approach and, in some cases, departure from past guidance, on SAR requirements, there is still some ambiguity as to what is expected from financial institutions under the new guidance. For example, even though the guidance says financial institutions do not have to document their decision to not file a SAR as it is not required under the Bank Secrecy Act, the guidance also states that the “level of appropriate documentation can vary” for organizations that opt to document those decisions, and that for most cases, “a short, concise statement documenting a financial institution’s SAR decision will likely suffice, although a financial institution may consider more documentation . . . in more complex investigation scenarios.” This reading suggests that decisions to not file SARs require at least some documentation, even if it is just in the form of a brief statement. Thus, financial institutions should be cautious in interpreting this guidance as grounds for not documenting a decision to not file a SAR in all circumstances; in some cases, it is still prudent to do so, particularly (as noted by FinCEN) in connection with complex investigations.
Conclusion
The new SAR FAQs are Treasury and FinCEN’s latest efforts to modernize AML compliance obligations to balance the utility of these filings with their compliance burdens, ensuring that financial institutions’ resources are focused on activities that provide law enforcement with the most meaningful information. 1See also Emily Gordy, Shas Das & Lauren Konczos, Fed Follows Earlier OCC, FDIC, and NCUA Orders Allowing Banks to Collect TIN Information from Third Parties, King & Spalding LLP Client Alert (Aug. 8, 2025). King & Spalding will continue to monitor developments in this space and is well equipped to advise clients subject to SAR filings and other AML obligations.