Posted on Wednesday, December 8, 2010
A proposal released Monday by the Financial Crimes Enforcement Network (FinCEN) would require non-bank residential mortgage lenders and originators to establish anti-money-laundering (AML) programs and to file reports when suspicious activity is suspected.
Under current regulations only banks and insured depository institutions are required to file suspicious activity reports (SARs).
FinCEN says SARS are a critical source of information for law enforcement in investigating and prosecuting mortgage fraud related crimes, and that it believes new regulations requiring non-bank mortgage lenders and originators to adopt AML programs and file SARs would be consistent with those businesses’ due diligence.
“These lenders and originators generally deal directly with consumers. As important mortgage finance providers they are ideally positioned to access and identify money laundering risks and possible mortgage fraud,” said FinCEN director James H. Freis, Jr. “This protects both their business interests and their customers from the abuses of fraud and financial crime.”
According to the FinCEN Web site, money laundering is the process of making illegally-gained proceeds appear legal. In order to help prevent money laundering and other financial crimes, FinCEN, a division of the Treasury department, was established in 1970. It operates in Washington D.C., and New York City, with 20 regional offices around the United States.
DS news Carrie Bay