Compliance Q&A: OFAC Regulations

Must CUs file a Suspicious Activity Report each time they block a transaction?

June 16, 2013

Q. Are credit unions required to file a Suspicious Activity Report (SAR) every time they block a transaction to comply with Office of Foreign Assets Control (OFAC) regulations?

A. No. Filing an OFAC “blocking” report does not automatically trigger the Bank Secrecy Act’s (BSA) requirement to file a SAR. But there might be instances when the credit union will have to file reports with both Financial Crimes Enforcement Network (FinCEN) and OFAC. For example, credit unions are required to file a SAR in addition to the OFAC report if a transaction triggers BSA reporting rules for reasons other than a match on the OFAC list (e.g., suspected money laundering or ID theft); or if the credit union possesses information not included on the OFAC report that should be filed with FinCEN.

Q. Can a credit union charge for paper statements to encourage members to “go green” and convert to e-statements?

A. Yes. There’s no regulatory prohibition on charging for paper statements in either Regulation E (Electronic Fund Transfers) or Truth in Savings regulations. Credit unions may charge a reasonable fee for paper statements as an incentive for members to sign up for e-statements. Just remember that federal ESIGN Act requires voluntariness (“affirmative consent” or opt-in). As long as members are not required to sign up for e-statements, there’s no ESIGN violation. Lastly, don’t forget about the members who lack access to computers. Many institutions waive paper statement fees for these individuals.

Visit CUNA’s compliance blog— “CompBlog” for coverage of key issues. Also, email with questions or ideas, and keep the conversation going with your peers on COBWEB—CUNA’s compliance listserv.

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