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OCC BULLETIN 2004-24
Subject: Suspicious Activity Reporting
Date: May 26, 2004
To: Chief Executive Officers of All National Banks, Department and Division Heads, and All Examining Personnel
Description: Interagency Advisory: Federal Court Reaffirms Protections for Financial Institutions Filing Suspicious Activity Reports
The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision are jointly issuing the attached Interagency Advisory titled "Federal Court Reaffirms Protections for Financial Institutions Filing Suspicious Activity Reports" on May 26, 2004. The purpose of the advisory is to inform financial institutions about a recent federal court case, Whitney Nat'l Bank v. Karam, 306 F. Supp.2d 678 (S.D. Tex. 2004), that reaffirms the statutory protection from civil liability arising out of the filing of Suspicious Activity Reports (SARs) by financial institutions and their employees. This protection is generally referred to as a "safe harbor" and is contained in 12 USC 5318(g)(3) and the OCC's SAR regulation, 12 CFR 21.11.
The Whitney court sided with the majority of courts in ruling that a bank may not be subject to a civil suit regarding communications it may have made to law enforcement about suspected violations of law or suspicious activities. Further, the court ruled that a bank may not be required to produce documents in discovery relating to such communications or to the contents or existence of a SAR. In light of the Whitney decision, the agencies remain confident that financial institutions and their employees who follow the prescribed agency regulations and SAR filing instructions should be fully protected by the safe harbor provisions of the law.
For further information, please contact the OCC's Enforcement & Compliance Division at (202) 874-4800.
Daniel P. Stipano