The Financial Crimes Enforcement Network (FinCEN) has proposed a requirement for nonbank residential mortgage lenders and originators to establish anti-money-laundering (AML) programs and comply with suspicious activity report (SAR) regulations. Under current regulations, banks and insured depository institutions are the only mortgage originators required to file SARs.
FinCEN says that new regulations requiring nonbank residential mortgage lenders and originators to adopt AML programs and report suspicious transactions would be consistent with those businesses' due-diligence and information-collection processes to assess creditworthiness in lending, and could augment FinCEN's initiatives in this area. Additionally, the effectiveness of these proposed AML/SAR regulations may be enhanced by new rules imposed under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008.
‘These lenders and originators generally deal directly with consumers,’ says FinCEN Director James H. Freis Jr. ‘As important mortgage finance providers, they are ideally positioned to assess and identify money laundering risks and possible mortgage fraud.’
Analyses of SARs, which are periodically published in FinCEN's mortgage fraud reports, show that nonbank mortgage lenders and originators initiated many of the mortgages that were associated with SAR filings.