FinCEN Proposes New Rule Requiring Residential Mortgage Lenders and Mortgage Originators to Implement Anti-Money Laundering Programs and File Suspicious Activity Reports


On December 9, 2010, the Financial Crimes Enforcement Network (FinCEN) published a notice of proposed rulemaking (NPRM) explaining new requirements for residential mortgage lenders and mortgage originators to establish anti-money laundering (AML) programs and to comply with suspicious activity report (SAR) filing requirements under the Bank Secrecy Act (BSA). FinCEN published the NPRM following the advanced notices of proposed rulemaking published on April 10, 2003 and on July 21, 2009. Written comments for the NPRM are due by February 7, 2011.

Currently the only mortgage lenders and mortgage originators that are subject to the AML and SAR requirements are banks and insured depository institutions. With the NPRM, FinCEN intends to close the “regulatory gap” of BSA’s coverage between mortgage lenders and originators affiliated with banks and those not affiliated with banks. Residential mortgage lenders and originators (e.g., independent mortgage loan companies and mortgage brokers) are the primary providers of mortgage finance—in most cases dealing directly with the consumer—and are viewed by FinCEN to be in a unique position to assess and identify money laundering risks and fraud while directly assisting consumers with their financial needs and protecting them from the abuses of financial crime.

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Published In: Administrative Agency Updates, Criminal Law Updates, Finance & Banking Updates, International Trade Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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