2008 State BSA Data Profiles: Valuable Feedback from States Results in Significant Enhancements

By FinCEN Office of Regulatory Analysis

This section of The SAR Activity Review focuses on the use of BSA data by regulatory agencies. An article by FinCEN?s Office of Regulatory Analysis illustrates how feedback from state regulatory agencies has resulted in enhancements to the annual BSA Data Profiles FinCEN prepares for many states. Officials from two States, Nebraska and Oklahoma, provide additional insight into just two of the ways BSA data is being utilized by state regulatory agencies. Also in this section, representatives from the Federal Deposit Insurance Corporation (FDIC) and an office of the Internal Revenue Service (IRS) Small Business/Self Employed Division discuss how BSA data supports each agency?s regulatory mission.

FinCEN is committed to supporting regulatory agencies that examine financial institutions for Bank Secrecy Act (BSA) compliance. Many readers may be aware of FinCEN?s information sharing agreements with state and federal regulatory partners; since June 1, 2005, FinCEN has entered into Memoranda of Understanding (MOU) information-sharing agreements with 46 state supervisory agencies located in 42 states and one territory.

In negotiating information-sharing agreements with state supervisory agencies, FinCEN recognizes the growing importance of each state?s capacity to ensure compliance with federal and state laws and regulations to protect the U.S. financial system from the abuses of financial crime. FinCEN pledges to provide state regulatory agencies with advanced analytic products intended to improve the overall effectiveness of BSA administration and expand the use and value of BSA data in systematic analysis and targeting. Based on the analyses, state regulators may adjust resources and investigate certain financial activity occurring in various locations within the state.

In May 2007, FinCEN developed and disseminated the first state-specific Bank Secrecy Act Data Profile packages for state supervisory agencies with which it has information-sharing agreements. A four-section, 26-page product highlighted BSA filing trends and patterns within those states through December 31, 2006. FinCEN received positive feedback from various state agencies for the 2007 effort and, as a result, plans to continue to provide this product annually.

New content was added to the 2008 State BSA Data Profiles, partially based on feedback from last year?s products. The 2008 packages include enhanced and expanded exhibits incorporating intricate graphing, thematic mapping, and infusing of statistical data to depict each state?s suspicious activity and currency transaction reporting trends. This year?s product integrates current U.S. Census Bureau population data, which augment BSA data for each state. This edition adds maps illustrating national Suspicious Activity Report (SAR) filing trends and new trends analysis exhibits dedicated to mortgage loan fraud, filing patterns of Currency Transaction Report (CTR) and Currency Transaction Report by Casinos (CTR-C) filings, and graphical representations of registered and possible unregistered money services businesses (MSBs). The 46 profiles, and analysis developed for those states and territories without MOUs with FinCEN, were aggregated into consolidated packages and also provided to the Federal banking agencies and the IRS.

Profile Specifics

Each profile package is divided into sections, each with a specific focus and containing multiple exhibits displaying visual representations of the data. For example, certain sections provide exhibits illustrating reporting trends and comparison data for depository institution SARs filed from April 1, 2006 through December 31, 2007.2 Enhancements this year include individual state and national ranking maps based on SARs filed in 2007 and state SAR filing trend comparison graphs displaying the percentage change in filings from April 1996 through the end of 2007. Some profiles drill down further into the data by incorporating geographic pattern maps that zoom-in to that state?s largest urban areas.

The profiles include the top characterizations of suspicious activity reported by depository institutions in the state, including national geographic pattern and state thermal maps that provide volume data and hot spots for the top three types of suspicious activity. Also included are national and state maps depicting the subject address locations found in the 2007 SARs reporting mortgage loan fraud and state ranking maps relative to the SARs and each state?s population.3 A mortgage loan fraud SAR filing trend graph from April 1996 through 2007 is included.

Graphs depicting CTR filing trends and aggregate cash-in and cash-out transaction totals in the state for a 6-year period are included in the packages. If the state has casino operations, an additional exhibit shows CTR-C volumes and the percentage change from 2002 through 2007. For states that have casino and card club operations, another section is devoted to SARs filed by these operations, including a trend graph showing reporting volumes and percentage change for forms filed from August 1, 1996 through December 31, 2007.

Graphs depicting CTR filing trends and aggregate cash-in and cash-out transaction totals in the state for a 6-year period are included in the packages. If the state has casino operations, an additional exhibit shows CTR-C volumes and the percentage change from 2002 through 2007. For states that have casino and card club operations, another section is devoted to SARs filed by these operations, including a trend graph showing reporting volumes and percentage change for forms filed from August 1, 1996 through December 31, 2007.

Finally, the profiles include a series of maps identifying locations of MSBs registering with FinCEN during 2005-2006 and 2007. Maps showing the locations of unregistered MSBs identified by FinCEN analysts based on depository institution SARs for the same time periods are also included. A final graph depicts possible unregistered MSBs operating within the state by volume, total SARs filed, and total depository institutions filing these SARs in 2007.

Feedback

Improvements in this year?s profiles directly resulted from constructive feedback FinCEN received from state regulatory agency representatives regarding the usefulness of last year?s packages. One state representative found value in the state-by-state comparisons, particularly when adjusted for the population. A representative from one of the Federal banking agencies commented that ?having separate data profiles for each state makes it convenient to distribute the data to their respective regions.? FinCEN remains dedicated to providing useful analytic products to regulatory partners that rely on BSA information to manage and mitigate vulnerabilities associated with financial crime and will continue to improve these products based on customer satisfaction surveys and other feedback.

2 Data retrieved through a financial database search of depository institution SARs. The maps are populated using zip codes appearing in SAR records.
3 FinCEN created the national ranking maps by infusing SAR data with state population data obtained from the U.S. Census Bureau Annual Estimate of 2007. Excerpted from SAR Activity Review Issue 14, page 8