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Washington
FinCEN looks to add to list of SARAML institutions
WASHINGTON (12/8/10)--Non-bank residential mortgage lenders and originators would be required to follow the same suspicious activity report (SAR) regulations as credit unions and other financial institutions if proposed rules released by the Financial Crimes Enforcement Network (FinCEN) become law. The FinCEN rule would also require these financial entities to establish anti-money laundering (AML) programs similar to those of credit unions and other financial institutions. FinCEN Director James Freis said that bringing non-bank lenders and originators under the same SAR/AML regulations would protect “both their business interests and their customers from the abuses of fraud and financial crime." FinCEN rules currently require credit unions, banks and other insured depository institutions that originate mortgage loans to file SARs. FinCEN in a release said that the proposed rulemaking “would close a regulatory gap that allows other originators, such as mortgage brokers and mortgage lenders not affiliated with banks, to avoid having AML and SAR filing obligations.” According to the release, FinCEN believes that new regulations requiring non-bank residential mortgage lenders and originators to adopt AML programs and report suspicious transactions would be are “consistent with those business[es] due diligence and information collection processes to assess creditworthiness in lending, and could augment FinCEN's initiatives in this area.” The effectiveness of the AML/SAR changes may also be aided by the SAFE Act’s proposed development of a nationwide licensing system and registry for many mortgage professionals, FinCEN added. FinCEN will collect comments for 30 days after the notice is published in the Federal Register.
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