Federal regulators have moved to clear up widespread confusion among financial institutions about what they can legally say to customers regarding suspicious account activity.
FinCEN and four federal banking agencies issued a joint statement clarifying that Suspicious Activity Report confidentiality rules do not prevent banks from discussing underlying transactions or conduct with customers.
The statement was issued jointly by FinCEN, the Federal Reserve, the FDIC, the NCUA, and the OCC, forming a broad coalition of the country’s primary financial regulators.
Regulators confirmed the clarification does not change the Bank Secrecy Act or impose any new supervisory requirements on financial institutions operating in the United States.
The agencies said the statement was prompted by comments received in response to a Request for Information on how to mitigate the risk of payment fraud, especially check fraud.
The core prohibition remains firmly in place, meaning a bank still cannot disclose a SAR, or any information that would reveal a SAR has been filed, to the customer who is its subject.
That prohibition exists because disclosure could compromise active law-enforcement investigations and discourage financial institutions from filing SARs in the first place.
However, the agencies drew a clear and important distinction between disclosing a SAR and discussing the underlying facts, transactions, and documents on which a SAR is based.
Under the clarification, a bank can tell a customer that a transaction is suspected of being fraudulent, explain that a deposit was rejected due to suspected fraud, or warn a customer about a known fraud scheme.
Banks may also explain to customers that an account restriction or closure may be related to suspected fraud or other suspicious activity, without that conversation constituting a prohibited disclosure.
The agencies confirmed that even if a well-informed person might deduce that a SAR had been filed from the underlying facts shared, communicating those facts alone does not violate SAR confidentiality rules.
Banks and credit unions may also communicate with other financial institutions about potentially fraudulent or suspicious transactions involving a customer’s account, provided no SAR details are revealed.
The clarification carries particular weight in the context of the current administration’s fair banking and anti-debanking policy agenda, which has pushed for greater transparency between banks and their customers.
Regulators signalled that institutions should not treat SAR confidentiality as a blanket reason to refuse any explanation of adverse account actions taken against customers.
The joint statement therefore points toward a more open and communicative relationship between banks and customers, without dismantling the foundational confidentiality protections that underpin the SAR filing system.