FinCEN Offers Relief to Banks on ‘Overwhelming’ SARs Filings

The FAQs clarify that financial institutions are not required to file SARs simply because a customer’s transactions aggregate around the $10,000 Currency Transaction Report (CTR) threshold. Nor must institutions routinely re-review accounts after every SAR filing or document every decision not to file. The clarifications—long sought by industry—are part of a broader Treasury initiative to modernize anti-money laundering (AML) and countering the financing of terrorism (CFT) rules.

The most significant clarification, according to a WilmerHale client alert, concerns so-called structuring, when customers break large cash transactions into smaller ones to avoid CTR filings. FinCEN confirmed that banks need not file a structuring-related SAR absent any evidence that the customer intentionally structured transactions to evade reporting requirements.

Previously, many institutions filed SARs whenever cash transactions exceeded $10,000 in aggregate over a single day, even for legitimate business reasons, such as cash-intensive retailers or restaurants. Treasury officials acknowledged that the perceived expectation of filing every borderline case had “flooded the system with noise,” making it harder for law enforcement to identify meaningful risks.

Undersecretary for Terrorism and Financial Intelligence John Hurley said SARs “should deliver better outcomes by providing law enforcement the most useful information—not by overwhelming the system.”

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FinCEN also addressed confusion surrounding continuing activity reports. Past guidance suggested banks file follow-up SARs every 90 to 120 days when suspicious activity persisted. Over time, that recommendation became interpreted as a requirement to conduct manual post-SAR reviews of all relevant accounts.

The new FAQs make clear that such reviews are optional. Financial institutions may instead rely on risk-based monitoring systems “reasonably designed to identify and report suspicious activity” consistent with their own policies and controls.

In another major shift, FinCEN explicitly stated that financial institutions are not required to document their decision not to file a SAR. While firms may choose to record such decisions for internal quality assurance, the agency noted that “a short, concise statement” will typically suffice. The guidance eliminates what WilmerHale described as a longstanding “defensive documentation” culture, in which banks spent excessive resources justifying why routine transactions.

Hurley called the change overdue. “Every hour spent documenting a non-SAR is an hour not spent protecting Americans, and that trade-off is unacceptable,” he said.

Further reforms are expected. FinCEN and the prudential regulators are preparing a new AML Program Rule that will “re-center supervision where it should be: on the effectiveness of a bank’s AML/CFT program,” with greater openness to technological tools such as artificial intelligence, blockchain analytics, and digital identity verification

By clarifying that “less can be more” in SAR compliance, Treasury is signaling a shift toward a risk-based, intelligence-driven AML regime—one intended to strengthen national security while easing the regulatory drag on legitimate financial activity.