New guidance obtained by American Banker would reduce the number of suspicious activity reports, or SARs, banks are required to file, a move aimed at easing banks’ compliance burden and making data more useful for law enforcement. The Treasury Department, Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency are releasing a new Frequently Asked Questions guidance document that is meant to cut the compliance burden for banks and other financial firms by reducing the number of SARs that they need to file. Treasury said that the changes would refocus the system on reports that provide the greatest value to law enforcement. “SARs should deliver better outcomes by providing law enforcement the most useful information — not by overwhelming the system with noise,” said Treasury Under Secretary for Terrorism and Financial Intelligence John Hurley in a statement. “Compliance requires real resources, and that’s why prioritization is crucial. At Treasury, we will continue to reform our Anti-Money Laundering and Countering the Financing of Terrorism framework to de-prioritize low-value activity and direct compliance resources towards the most significant threats to our country.” Banks are required to file SARs to the Treasury Department’s Financial Crimes Enforcement Network, or Fincen, under certain circumstances, such as upon observing a known or suspected federal crime or when a customer deposits more than $10,000 in cash. Banks can also voluntarily file SARs on suspicious transactions that might be relevant to a possible violation. Banks tend to over-file SARs relative to what is required out of concern that they could face supervisory or enforcement penalties if they are found to have inadequate anti-money laundering controls. But the reporting rules have also become central to the administration’s crusade against political debanking because SARs filed against a consumer can lead to that person or group losing access to banking services. The OCC even recently warned financial institutions against using voluntary SARs as “a pretext to improperly disclose customers’ financial information.” The new guidance from the banking regulators should ease some of those worries.