VIENNA, Va. (11/4/11)--Government-sponsored enterprises (GSEs) Fannie Mae, Freddie Mac and the Federal Home Loan Banks would be required to develop anti-money laundering (AML) programs and file suspicious activity reports (SARs) with the Financial Crimes Enforcement Network (FinCEN) under a plan proposed Thursday.
The GSEs currently file fraud reports with their regulator, the Federal Housing Finance Agency (FHFA), which then files SARs with FinCEN when the facts in a particular fraud report warrant a SAR under FinCEN's reporting standards
The new reporting regime, FinCEN said, would streamline the reporting process, provide law enforcement with quicker access to data about potential fraud, and result in the reporting of a wider range of suspected financial crimes.
"This action is another step to help restore the integrity of the mortgage market," said FinCEN Director James H. Freis, Jr. in a release. "Providing law enforcement with quicker access to data about potential financial crimes will help them better hold illicit actors accountable for mortgage fraud and other scams."
FinCEN said another important benefit to the GSEs of developing an AML program and filing SARs directly with FinCEN is that the GSEs, including their directors, officers, and employees, will become subject to the Bank Secrecy Act's (BSA) "safe harbor" provisions, which are intended to encourage financial institutions to report suspicious activities without fear of liability from lawsuits by SAR subjects.
The comment period is open for 60 days from the date of publication in the Federal Register.