We want to thank everyone who attended our webinar "Anti-Money Laundering: Non-Bank Compliance." We had many excellent questions during the webinar, and we were able to answer a few on air. For questions that weren't answered during the webinar, you can find the answers below. You can also download the slides below.
Q: As a lender, what is your recommendation on how to monitor the brokers?
A: You should have a program to monitor your brokers. That program will also be risked based. You should assess your brokers by location, product mix, volume, size (number of originators), etc. The program will then design a method of monitoring them based on risk. Your tools will include prefunding audits, post closing audits, onsite audits or reviews, training, etc. The audits will each generate a report for your board of directors or senior management and should include trending as time goes on. This will allow your management to assess the compliance risk they pose. I might add that your broker program will be designed to ensure they comply with all consumer protection laws, as well as your own policies and guidelines.
Q: Can AML compliance officer be the same as SAR officer?
A: Yes and in most cases they are the same.
Q: How often is reporting required and if you have nothing to report, do you still send in a report?
A: If you have nothing to report, then you do not send anything to FinCEN.
Q: what is the best way to complete verification when we take most of our apps over phone or through the internet and never actually meet the borrower?
A: Because your origination model is remote it is a higher risk origination model. You will need to develop controls or enhanced due diligence (EDD) procedures to ensure the borrower is who they claim to be. As discussed briefly in the presentation, your Identity Theft Prevention Program (Red Flags), your Anti-Fraud Program and your AML program will all work together. There isn't one thing you are going to do, instead you will have to develop a process to ensure your company adequately addresses all the risks posed by remote originations.
Q: Record Sharing: Is it true that In order to receive info from 314a, the RMLO is required to be enrolled in advance with 314b?
A: I don’t believe that is the case. Here is a recent fact sheet on 314a information sharing from the FinCEN website: http://www.fincen.gov/statutes_regs/patriot/pdf/314afactsheet.pdf.
Q: Are we also required to identify people who we suspect are here illegally? The IRS issues ITIN numbers to illegal aliens
A: As discussed briefly in the presentation, your Identity Theft Prevention Program (Red Flags), your Anti-Fraud Program, and your AML program will all work together. There isn’t one thing you are going to do, instead you will have to develop a process to ensure your company adequately addresses all the risks posed by borrowers who may be hear legally. Lending to illegal aliens may also pose a credit risk problem as they may not be able to repay if deported. That said, I am not currently aware of any law that would prohibit you from making a loan to an illegal alien, just make sure you perfect your security interest in the collateral.
Q: Are we not supposed to discuss the implementation of the BSA or SAR program with consumers?
A: You are prohibited from discussing the filing of SARs with consumers or anyone else for that matter. The fact that a SAR even exists is confidential. Your program in general shouldn't be a problem to discuss, but I am not sure what or why you would discuss it with them.
Q: Are we supposed to enroll on the BSAE filing site prior to filing an actual SAR?
A: Yes. The following is from the FinCEN website: http://www.fincen.gov/forms/e-filing/Efiling_FAQs.html
What steps must be taken to register for E-Filing?
Visit the BSA E-Filing System. Click Become a BSA E-Filer and follow the instructions in order to enroll yourself as an individual FBAR filer or your organization as a Supervisory User in BSA E-Filing. The enrollment process can take from five to seven days. If your organization has already enrolled in BSA E-Filing, contact your organization's Supervisory User to obtain instructions for enrolling yourself as a general user.
Where can I find more information about BSA E-Filing?
For more information about BSA E-Filing, please review the E-Filing Section on FinCEN's website. FinCEN is committed to working with financial institutions to increase their understanding of the value of E-Filing and has issued a brochure that highlights its benefits. For other technology-related questions specific to E-Filing, please call the BSA E-Filing Help desk at 1-866-346-9478. FinCEN has additionally prepared an instructional presentation on how to file electronically.
Q: Are there any regulations against the assigned Compliance Officer being the owner of the Mortgage company?
A: You are always going to want to have compliance be independent of production. Ideally the person who runs the compliance program for your company will report to the president/owner/board of directors, etc. The compliance program will be designed to ensure compliance with all lending and consumer protection laws. A compliance program includes policies and procedures, training, monitoring, and reporting. The monitoring of compliance will generate reports. These reports will be provided to the highest levels of your management structure so that you may assess and address lending and consumer protection compliance risk in your company. From there you may change policies or procedures and the process starts all over again. Therefore, as an owner you would play an important roll in directing the company to address and mitigate risk, however you may not have time or be able to write the policies and procedures, ensure training is adequately provided, monitor compliance and prepare reports, and all that a compliance program entails.
(MetaSource makes reasonable efforts to ensure the accuracy of the answers. MetaSource makes no express or implied warranty of any kind respecting the information presented and assumes no responsibility for errors or omissions. This online content is not legal advice and should not be used as a substitute for proper professional or legal advice.)