Maintaining a Customer Relationship Following the Filing of a SAR or Multiple SARs
Is a financial institution required to terminate a customer relationship following the filing of a SAR or multiple SARs?
No. There is no BSA regulatory requirement to terminate a customer relationship after the filing of a SAR or any number of SARs. The decision to maintain or close a customer relationship as a result of the identification of suspicious activity is a determination for a financial institution to make based on the information available to it, its assessment of money laundering or other illicit financial activity risks, and established policies, procedures, and processes. Financial institutions have the flexibility to develop risk-based procedures and monitoring processes for the purpose of updating the customer risk profile and determining when to maintain or close accounts. Generally, financial institutions have policies, procedures, and processes in place that establish an escalation process for decisions to maintain or terminate customer relationships based on relevant factors, including SAR filing(s). These processes establish criteria, including when review by senior management and legal staff is warranted, for the decision to maintain or terminate the customer relationship in light of elevated risk factors. As indicated above, there is no specific number of SAR filings that a financial institution must consider to trigger any particular escalation step. Rather, the number of SAR filings and other factors that trigger escalation steps may vary based upon, among other things, the risk profile of the customer, including the geographical locations involved, the volume and type of transactions conducted by customers, the type of account, and the types of SARs filed by the financial institution in relation to the customer.