In one of the most consequential anti–money laundering (AML) developments in years, the US Department of the Treasury has announced sweeping clarifications to the rules surrounding Suspicious Activity Reports (SARs). Released on 9 October 2025 by the Financial Crimes Enforcement Network (FinCEN) in coordination with the Federal Reserve, FDIC, NCUA, and OCC, the new FAQs aim to simplify the SAR process and reduce unnecessary compliance burdens that have long frustrated U.S. financial institutions.
For compliance professionals, this is not a minor procedural update. It’s a clear signal that the US is reorienting its AML regime toward efficiency, proportionality, and true risk focus — away from the paperwork-heavy culture that has defined Bank Secrecy Act (BSA) compliance for decades. Treasury Under Secretary John Hurley was explicit: “Banks should not be needlessly expending resources on efforts that do not provide law enforcement and national security agencies with the critical information they need.”
Why these changes matter
For years, financial institutions have complained that SAR obligations have become an exercise in regulatory over-compliance: filing reports out of caution, rather than suspicion, and documenting every non-filing decision to avoid examiner criticism. This culture has consumed vast resources without necessarily improving law enforcement outcomes. For instance with cannabis compliance, banks and financial services are required to submit SARs even when the situation is low or no risk.
By streamlining the SAR regime, FinCEN hopes to relieve banks of rote tasks — such as repeatedly reviewing accounts post-SAR or documenting every “no-SAR” decision — and redirect that effort toward identifying genuinely high-risk behaviour.
If implemented as intended, the FAQs could redefine what “effective AML compliance” looks like in practice. But the true impact will depend on how examiners apply these clarifications during supervision and whether institutions feel confident enough to reduce unnecessary filings.
What are the specific SAR changes the Treasury is proposing?
Structuring SARs
The most immediate relief concerns structuring — transactions deliberately designed to avoid the $10,000 Currency Transaction Report (CTR) threshold. FinCEN has clarified that the mere presence of transactions near that threshold does not automatically trigger a SAR requirement.
Institutions are only obliged to file when they “know, suspect, or have reason to suspect” that transactions are designed to evade reporting requirements. In other words, proximity to $10,000 is not enough — there must be actual suspicion of intent.
For years, banks have been filing SARs for perfectly legitimate customers whose transactions happen to hover around the reporting limit. The new clarification tells compliance teams: stop flooding the system with noise. Focus on genuine structuring risk, not mechanical thresholds.
Continuing Activity Reviews
Historically, FinCEN’s guidance implied that financial institutions should conduct manual reviews every 90 days after an initial SAR filing to determine if suspicious activity has continued. Over time, this evolved into a de facto regulatory expectation — a costly and time-consuming exercise for compliance teams.
FinCEN has now made clear: there is no requirement for a separate, manual review of accounts after a SAR filing. Instead, institutions can rely on their existing risk-based monitoring processes.
This clarification directly tackles one of the most burdensome misinterpretations in the BSA regime. It restores flexibility, allowing compliance teams to tailor reviews to genuine risk, rather than arbitrary timelines.
Timeline for continuing activity SARs
Under the old guidance, continuing SARs were expected to be filed every 90 days, with a 120-day filing deadline. The new FAQs extend that window to 150 days after detection and confirm that continuing SARs do not need to be filed at fixed 90-day intervals.
Instead, filings should occur “as appropriate in line with applicable timelines.” This subtle but significant shift allows institutions to apply professional judgment, filing updates when there’s new or relevant information, rather than to satisfy a ticking clock.
The change acknowledges that not all ongoing suspicious activity fits neatly into three-month cycles and gives banks the latitude to operate on a more realistic, risk-based schedule.
Documentation of “No-SAR” decisions
Perhaps the most welcome clarification: there is no requirement under the BSA to document a decision not to file a SAR.
In practice, banks have been spending countless hours justifying their “no-SAR” calls to internal auditors and regulators. FinCEN now states that, while institutions may choose to document such decisions, a short, concise statement will typically suffice.
The Treasury’s message is blunt: compliance resources should be used to protect the financial system, not to generate paperwork for its own sake. Still, institutions are advised to retain sufficient documentation for internal quality control or in case regulators later question their rationale.
What does this mean for compliance teams?
These clarifications should prompt an immediate internal review of AML policies and SAR workflows. Compliance teams will need to:
- Reassess monitoring thresholds for structuring alerts.
- Update internal procedures and risk-based review schedules.
- Revise documentation expectations and templates for “no-SAR” decisions.
- Train analysts and investigators to apply judgment rather than default to over-reporting.
Equally, institutions must prepare for a period of adjustment. Examiners may interpret these clarifications inconsistently until supervisory manuals are updated — including the FFIEC’s BSA/AML Examination Manual, which currently embeds many of the older, now-outdated expectations.
The key will be demonstrating a reasoned, risk-based approach. Regulators are unlikely to fault institutions that can show they have thoughtfully recalibrated their SAR processes in line with FinCEN’s intent: efficiency and effectiveness.
The bigger picture: A shift in AML philosophy
The SAR FAQs are not an isolated development. They are part of a broader Treasury agenda to modernise the U.S. AML/CFT regime, moving from compliance formalism toward outcome-driven enforcement.
At ACAMS Vegas this year, John K. Hurley, the Under Secretary for Terrorism and Financial Intelligence, signalled a serious rethink of America’s anti-money laundering playbook. His keynote wasn’t box-ticking rhetoric; it laid out an intelligence-first model, with law enforcement and national security agencies positioned as the true “customers” of the AML system.
In practice, this could mean a recalibration of how AML effectiveness is measured — not by the number of SARs filed, but by their utility to law enforcement and national security agencies. That shift is profound.
What are the next steps?
Unlike legislative changes that require Congressional approval, FinCEN’s new SAR guidance takes effect through the administrative powers already granted under the Bank Secrecy Act (BSA). Because these are interpretive clarifications, not new laws or rules, they are effective immediately upon publication. Financial institutions can rely on them as the official position of FinCEN and the federal banking regulators on how existing SAR obligations should be applied in practice.
However, while the guidance is now in force, its impact will depend on how examiners implement it. Each of the federal regulators — including the Federal Reserve, FDIC, OCC, and NCUA — will need to align their supervisory expectations and update the Federal Financial Institutions Examination Council (FFIEC) BSA/AML Examination Manual, which currently embeds many of the outdated 90-day review and documentation requirements that the FAQs are designed to relax. That process is expected to take several months.
In the meantime, financial institutions are expected to update their own internal policies, procedures, and training to reflect the new interpretations. Compliance teams should document their adjustments as part of their regular AML program review cycle, revising SAR timelines, documentation standards, and ongoing monitoring procedures in line with the clarified expectations.
As examiners begin to apply the guidance, a bedding-in period is likely, during which feedback from banks and supervisors may prompt further clarification from FinCEN or minor revisions to the FFIEC Manual. Over the longer term, Treasury could choose to formalise these interpretations through rulemaking, publishing a Notice of Proposed Rulemaking in the Federal Register and inviting public comment — but for now, these changes stand as binding supervisory guidance under existing BSA authority.
