On October 9, 2025, the Financial Crimes Enforcement Network (FinCEN) issued a new set of Frequently Asked Questions (FAQs) to provide greater clarity on several recurring issues under the Suspicious Activity Reporting (SAR) regime. Developed in collaboration with the Federal Reserve, FDIC, NCUA, and OCC, the FAQs reflect a coordinated interagency effort to ensure consistent interpretation and application of SAR requirements across the U.S. financial system. The overarching goal of this release is to help financial institutions better prioritize high-value, actionable reports rather than overproducing low-quality or duplicative filings that add little value to law enforcement investigations.
Among the main areas of clarification, FinCEN addressed how institutions should interpret and respond to structuring activity, reminding filers that SARs should only be generated when there is a reasonable indication of deliberate structuring to evade reporting requirements. Institutions are encouraged to reassess their internal monitoring thresholds to avoid both over-reporting (which clutters the SAR system) and under-reporting (which creates regulatory gaps). The FAQs also revisited the expectations surrounding continuing SARs, emphasizing that once a SAR has been filed, financial institutions are required to conduct ongoing reviews, generally every 90 days, to determine whether the suspicious activity persists. When additional relevant activity is identified, a continuation SAR should be submitted with updated findings. This clarification underscores the importance of formalized review procedures, consistent monitoring timelines, and clear documentation of follow-up actions to maintain compliance integrity.
FinCEN further clarified when an institution may reasonably decide not to file a SAR, providing examples where no suspicious or illicit activity can be substantiated despite preliminary alerts. However, this discretion comes with the expectation that institutions maintain robust internal documentation to justify their decision. Clearly recording the rationale behind “no-file” determinations, whether due to threshold limitations or insufficient evidence, is now seen as a key compliance expectation. Lastly, FinCEN reaffirmed its focus on reducing regulatory noise and resource strain, encouraging firms to allocate investigative efforts toward higher-risk or more complex patterns of activity. The message is clear: a risk-based approach should guide both transaction monitoring and SAR decision-making, shifting institutional resources away from low-intent, low-value alerts and toward genuinely suspicious conduct.
From a strategic standpoint, the FAQs illustrate several broader trends that compliance leaders, including those at AFC Group, should closely consider. First, regulators are clearly moving toward an effectiveness-based model of AML compliance, valuing the quality, timeliness, and usefulness of reports over sheer volume. Institutions must ensure their systems and analysts are calibrated to produce meaningful intelligence rather than procedural filings. Second, documentation discipline is becoming increasingly critical. Both the decision to file and the decision not to file a SAR must be supported by strong internal audit trails, rationale memoranda, and clear governance sign-offs to withstand regulatory scrutiny.
The joint publication of these FAQs also signals a heightened alignment among U.S. banking regulators, meaning future examinations will likely apply these standards uniformly. This presents an opportunity for institutions to review and update their internal SAR policies, including escalation protocols, review cycles, and staff training modules, to ensure consistency with FinCEN’s clarified expectations. Nonetheless, operational challenges remain, particularly in managing ambiguous transactions, grey areas around structuring behavior, and maintaining consistency across multiple business lines, such as payments, iGaming, or fintech integrations.
Ultimately, this new guidance reflects FinCEN’s ongoing effort to modernize and rationalize the U.S. SAR framework. It encourages a shift from volume-driven compliance to intelligence-driven compliance, emphasizing practical judgment, regulatory proportionality, and interagency consistency. AFC Group continues monitoring FinCEN releases, advisory updates, or rulemakings that may build upon this initiative, ensuring that client programs remain aligned with both the letter and spirit of AML obligations as they evolve.