A new era in filing requirements is about to begin. For the first time, the Financial Crimes Enforcement Network (FinCEN) will require nonbank mortgage lenders and originators to implement an Anti-Money Laundering program (AML Program) and file Suspicious Activity Reports (SARs) for certain loan transactions.FinCEN is establishing this AML program in accordance with the Bank Secrecy Act (BSA). The guidelines relating to the AML requirement become effective on April 16, 2012, and the AML Program’s effective compliance date is Aug. 13, 2012. The AML program and SAR filing regulations, which I will refer to as “FinCEN’s rule,” are considered to be “the first step in an incremental approach to implementation of regulations for the broad loan or finance company category of financial institutions.”
The Bank Secrecy Act defines the term “financial institution” to include, in part, a loan or finance company. This terminology, however, can reasonably be construed to extend to any business entity that makes loans to or finances purchases on behalf of consumers and businesses. Thus, nonbank residential mortgage lenders and originators, and mortgage brokers, are grouped into the “loan or finance company” category.5 However, the term ‘‘loan or finance company’’ is actually not concisely defined in any FinCEN regulation, and there is no legislative history on the term itself.
Detailed report link: here